ETH Price Breakout Against BTC Signals Structural Market Shift

Ethereum broke out of a years-long downtrend against Bitcoin (BTC) in mid-2025, creating a potential turning point in the market.

On-chain and ETF data supported the move, raising the prospect of structural changes in dominance between the two largest tokens.

ETH Price Broke Multi-Year Resistance

A post from CryptoBusy on X showed ETH breaking above a resistance line that had held since 2021.

The move completed a falling wedge pattern, a formation often linked with potential upward reversals. Analysts said this shift created technical space for higher Fibonacci retracement levels.

The breakout suggested that Ethereum could begin challenging BTC more directly. Since the last cycle, Bitcoin maintained dominance across trading pairs.

Now, the ETH/BTC ratio showed signs of recovery, shifting attention toward Ethereum’s role in decentralized finance (DeFi) and smart contracts.

At the time of writing, the ETH price held near the breakout zone. Analysts said that if the token managed to confirm support above that level, the next area of interest would be the $3,700 resistance region.

That zone was identified in an InvestingHaven note from August 8. Clearing it could open the way toward targets near $4,000.

ETH Price Supported by Supply Data

On-chain metrics reinforced the breakout narrative. Data from Santiment showed the share of ETH held on centralized exchanges dropped below 4.9%.

That level was last recorded during BTC’s rally in 2021. A reduced exchange balance often suggested accumulation by long-term holders or institutions, as fewer tokens were available for immediate sale.

This supply shift aligned with ETF activity. Reports from CoinShares confirmed five consecutive weeks of inflows into ETH-based exchange-traded funds by mid-2025.

Consistent buying from ETF products added capital into the Ethereum ecosystem and signaled institutional confidence in the asset.

The twin forces of lower exchange supply and ETF demand supported arguments for potential scarcity.

Analysts compared the situation to phases in previous cycles when reduced liquid supply created upward momentum in token prices.

Outlook as ETH Challenges BTC

The ETH price faced challenges despite its breakout. Analysts warned that profit-taking or a failed retest of support could cause volatility.

The $3,700 zone remained the first hurdle before higher levels could be discussed. Market observers also recalled that Bitcoin historically regained strength after similar moves.

The ETH/BTC ratio’s sustainability would depend on whether inflows and accumulation continued. At press time, the ratio remained above its long-term trendline for the first time in several years.

Ethereum’s shift carried implications beyond the chart. DeFi protocols, NFT platforms, and other Web3 projects largely relied on Ethereum.

A stronger ETH could redirect developer activity and liquidity back to the network, potentially increasing its role in shaping digital finance.

Looking forward, the breakout suggested the rivalry between Ethereum and Bitcoin had entered a new phase.

Structural factors such as ETF inflows, exchange supply, and resistance levels would determine whether Ethereum sustained its position or reverted to prior ranges.