Ethereum: Assessing how ETH could outperform Bitcoin in Q4

Key Takeaways

Is Ethereum showing relative strength despite BTC’s early Q4 rally?

Ethereum is holding a net gain of 7.02% versus BTC’s 4.34% for October, with on-chain stablecoin inflows signaling institutional interest.

Is institutional rotation into ETH gaining momentum?

BlackRock’s recent moves, combined with the ETH/BTC ratio nearing 0.04, suggest strategic rotation rather than a short-term trade.

So far in Q4, Ethereum [ETH] has lagged behind Bitcoin [BTC], showing a 6.94% dip. But if we look closely, BTC is only 1.15% ahead, despite its nearly 11% rally in the first week that pushed it to an all-time high of $125k. 

From a technical perspective, BTC’s net gain for October stood at 4.34%, at press time, while ETH remained at a net gain of 7.02% following its 15% first-week surge.

In short, ETH is still holding strong relative to BTC.

Notably, this resilience is evident on the weekly chart. BTC has dropped 7.15% with two back-to-back lower-low candles, testing its late-June support at $103k. ETH, on the other hand, is holding onto its August gains.

Source: TradingView (ETH/USDT)

Against this backdrop, the ETH/BTC ratio is on the verge of snapping its first weekly green, bouncing nearly 9% off the recent crash to 0.03, reinforcing the thesis that rotation into ETH could be gaining momentum.

On-chain, Ethereum’s stablecoin supply is signaling the same strength. The 7-day stablecoin supply on Ethereum has jumped 2.18%, adding $3.47 billion and pushing the total to a fresh all-time high of $163 billion. 

Simply put, more dry powder is flowing into the ecosystem. Combine this with Ethereum’s resilience versus BTC, and it raises the question: Is rotation into ETH shaping up to be more strategic than a short-term trade?

Institutions turn to Ethereum amid market shifts

BlackRock is driving the rotation thesis in action. 

Arkham data shows the firm moving 300 BTC across its last fifteen transactions, accounting for roughly 4,500 BTC offloaded. At the same time, it accumulated 12,400 ETH from Coinbase Prime.

The effects are visible on the chart: Ethereum was up 1.12% intraday, holding the $3,830 support despite ongoing weakness in ETH ETFs, while the ETH/BTC ratio hiked 1.56%, at the time of writing, inching closer to key resistance at 0.37.

Source: TradingView (ETH/BTC)

In this setup, the surge in stablecoin liquidity isn’t random. 

Instead, it points to “targeted” capital flowing into Ethereum, suggesting that institutions are rotating for a longer-term rather than chasing short-term trades, with October’s price action so far reinforcing this strategy.

Against this backdrop, the ETH/BTC ratio is eyeing the 0.04 zone, signaling a potential breakout in favor of Ethereum versus Bitcoin, suggesting that ETH’s monthly lag may be nothing more than a short-term blip.