Bitcoin Long-Term Holders Shift to Ethereum: ETH Price ATH on the Horizon?

Bitcoin’s status as the go-to cryptocurrency for long-term holders appears to be changing. Ethereum is emerging as a serious contender, with its long-term holder base swelling throughout 2024. The shift could pave the way for Ethereum to outperform Bitcoin in the coming year. Here’s what’s driving the trends and how the markets are responding.

A Tale of Two Cryptocurrencies: Bitcoin vs. Ethereum

Data from blockchain analytics platform IntoTheBlock reveals an intriguing shift in the behaviour of long-term crypto investors. The percentage of Ethereum long-term holders has surged from 59% in January to 75% by December 2024. Meanwhile, Bitcoin has seen a decline in its long-term holder base, dropping from 70% to 62.3% during the same period.

This sharp divergence reflects changing investor sentiment. Ethereum’s consistent accumulation signals confidence in its long-term prospects, while Bitcoin holders appear to be cashing in on 2024’s rally.

Heavy Profit-Booking Sends Bitcoin Prices Tumbling

Bitcoin experienced a blockbuster rally earlier this year, touching an all-time high of $108,000. However, the euphoria was short-lived as heavy profit-taking by long-term holders caused the price to correct sharply. By December, Bitcoin was struggling to maintain support above $95,000.

Prominent trader Peter Brandt has flagged a potential head-and-shoulders pattern in Bitcoin’s price chart. If confirmed, this could see BTC dip as low as $78,000 before any recovery.

Still, optimism persists among analysts for Bitcoin’s prospects in 2025. The cryptocurrency needs to convincingly break through the $100,000 resistance to reignite its bullish momentum.

Ethereum Poised for a Strong Reversal?

Despite underperforming Bitcoin throughout 2024, Ethereum’s price trajectory is sparking interest. Analysts are closely watching the ETH/BTC pair for signs of a reversal. Daan Crypto Trades, a popular analyst, points to Ethereum’s attempt to establish a higher low against Bitcoin. Breaking the key 0.04 BTC level could confirm this shift, potentially leading to broader altcoin gains.

Historically, the ETH/BTC pair has performed well in Q1, and traders are banking on similar momentum in early 2025. Reduced Bitcoin dominance, coupled with increased inflows into Ether-based ETFs, supports this optimistic view.

Institutional Interest Bolsters Ethereum’s Case

Institutional interest in Ethereum has surged over recent months. Spot Ether ETFs reported net inflows of $2.1 billion by December 2024, doubling from $1 billion in November. This influx of funds underscores growing confidence in Ethereum’s value proposition, particularly amid expectations of favourable policies under the Trump administration.

For Ethereum to outperform Bitcoin in 2025, its price will need to break through the stubborn $4,000 resistance level. However, with its long-term holder base growing and institutional interest rising, Ethereum appears well-positioned to challenge Bitcoin’s dominance.