Ethereum's Relative Strength Faces Test as BTC Rebound Continues

Ethereum's recovery has been gaining momentum, but its recent price action is leaving many wondering if it can continue to outperform Bitcoin. After another failed attempt to hold above $2,800, Ethereum is trading near $2,690.

According to an analysis by Richard Salmond, from early June through mid-September, ETH gained about 25%, compared with roughly 5% for Bitcoin. He linked this divergence to stronger capital inflows and changes aimed at improving Ethereum's network economics and institutional appeal.

The relative strength of Ethereum has been real, but it hasn't been smooth. Bitcoin recently surged to an eight-month high above $87,000, helped by ETF demand, improving liquidity, and short covering. This rebound narrowed some of Ethereum's earlier advantage and showed that capital can rotate back toward BTC quickly when broader crypto sentiment improves.

One reason ETH may still have room to outperform is institutional demand. U.S. spot Ether ETFs recorded another $87 million net inflow on Sept. 25, led by BlackRock's ETHA, following several strong sessions earlier in the week.