- Ethereum extracted massive liquidity from Bitcoin in January and positioned itself for another strong performance.
- With stakes higher than ever, ETH is on track to surpass Bitcoin.
As the new year starts, there is a major shift happening in the crypto market. New Capital Is Pulling Out of Bitcoin [BTC]as uncertainty looms after the recent crash. Investors are tense and uncertain about what is to come.
Meanwhile, ongoing macroeconomic turbulence, especially concerns about a looming US debt crisis, is raising fears of a repeat of the 2022 Bitcoin cycle.
In the midst of this, Ethereum [ETH] is gaining serious ground, with its strong historical performance attracting the attention of many investors.
With the first quarter upon us and the market in flux, will Bitcoin or Ethereum offer the strongest returns? Now is the time to weigh your options and decide where to place your bets.
Ethereum/Bitcoin January rally in pictures
Historical trends tell us that the first quarter is often a strong quarter for crypto. While Bitcoin has been making headlines, Ethereum has consistently outperformed with stronger price gains.
Around mid-January, the ETH/BTC pair typically experiences a series of green candlesticks, often indicating a sharp increase in capital inflows by February. This year, Ethereum rose 85%, reaching $4,087 in mid-March.
Source: TradingView
But it’s not just the graphs that matter. Mid-January is also a critical time for governments as they finalize their annual budgets. And this year the stakes are higher than ever.
With the new administration planning to tackle as much as $7 trillion in debt and cut spending, the pressure is on. Add to that the growth debate on raising the debt ceiling, and we face a volatile mix.
In short, the government’s approach to tackling its debt could pose even greater financial challenges down the road.
But will Bitcoin become a safer bet?
It’s a high-stakes gamble. Bitcoin’s recent decline from its ATH of $108,000 to $92,000 signals a difficult market environment, with investors remaining cautious.
Retail FOMO is on hold – unless a significant dip sparks a buying frenzy. Now it’s up to the big players to cause a supply shock.
With 2025 set to be volatile, the answer seems clear: Bitcoin may not be the safe bet just yet.
Adding to the uncertainty is Bitcoin’s long-term control, which has fallen to 62.31%. In contrast, Ethereum’s LTH is strong at 75.06%.
Source: IntoTheBlock
Bitcoin’s LTH rate has been declining since March, when BTC reached $73,000, and continues to decline even after new ATHs.
Meanwhile, Ethereum has been on a steady uptrend, with LTH control growing along with the rally to $4K. The message is clear: Ethereum’s long-term holders are confident and committed.
This shift is crucial for one key reason: retail investors often use LTH numbers as a sign of market confidence. Ethereum’s growing LTH base is a strong indicator of stability.
Read Ethereum [ETH] Price forecast 2025-2026
When you take into account Ethereum’s solid historical performance in January and strengthening support from long-term holders, it is clear that Ethereum is poised to take the lead and potentially leave Bitcoin behind.
But the real catalyst is yet to come. Stay alert during this high-stakes month. It could set the stage for a year full of big moves and even bigger opportunities for your portfolio.