Capital is rapidly rotating from Bitcoin into Ethereum, as evidenced by whales offloading BTC to buy ETH, and institutional inflows into Ethereum ETFs outpacing those for Bitcoin. Yet some analysts warn this may be short-lived.

New findings suggest that this tide could reverse.

Final Rotation Into Bitcoin

Benjamin Cowen, founder of IntoTheCryptoverse, argues that Bitcoin dominance is on the verge of finding a bottom and heading higher, regardless of BTCs short-term price trajectory.

In his latest X post, Cowen laid out three possible scenarios, all of which historically favor BTC dominance rising. In the first scenario, if Bitcoin successfully bounces off its 20-week simple moving average (SMA) and pushes higher, the crypto asset will lead the market upward, similar to what unfolded in 2017. This will result in capital rotating from altcoins into Bitcoin.

In the second scenario, if Bitcoin fails to hold the 20W SMA and instead falls toward the 50W SMA, as seen in Q3 2024 and Q1 2025, altcoins would take disproportionately larger losses compared to BTC, thereby accelerating dominance in Bitcoins favor.

The third scenario is if Bitcoin consolidates around the 20W SMA for an extended period, like in 2020. In such a stagnant phase, altcoins typically bleed out slowly against BTC, again boosting dominance.

The execs key message is that no matter whether Bitcoin rises, falls, or moves sideways, altcoins are at risk of losing ground. He believes this sets the stage for the final rotation into Bitcoin during this market cycle, validating its role as the asset that ultimately captures market leadership.

Bitcoins Melt-Up is Loading

Alongside dominance trends, seasonal factors are also in focus. September has historically posed challenges for Bitcoin, which has closed in the red in 8 of the last 12 years. However, the pseudonymous crypto trader Axel Bitblaze this cycle may break that pattern.

They pointed out that structural tailwinds are aligning differently this time as Bitcoin ETFs are steadily absorbing supply, interest rate cuts are on the horizon, and global liquidity conditions are improving. These factors could cushion BTC against the usual September weakness. Bitblaze does acknowledge the possibility of early-month choppiness or even a dip, but he framed it as a potential setup rather than a breakdown.

Drawing a parallel to 2017, they suggested that if history rhymes, the real move for the cryptocurrency could come after September, setting the stage for a strong Q4 rally. With Q4 traditionally being the most bullish period for BTC, he implied that Red September might give way to a powerful melt-up.