Ethereum has not mirrored Bitcoin’s upward movement, creating a noticeable divergence in their charts. While Bitcoin (BTC) has shown strong breakout candles, closing at $107,111 and marking its highest levels since mid-January, Ethereum (ETH) has faced a clear divergence. After being rejected at the $2,737 supply zone on May 13th, ETH has drifted lower, losing nearly 13% from its local high.
Early warning signals suggest that smart capital is accumulating near local tops, targeting stop-loss clusters to trigger bullish continuation. However, current on-chain signals indicate a potential shift toward distribution, with large holders offloading ETH positions. For instance, one whale who purchased ETH around $1,770 per unit recently cashed out near $2,440, realizing a $3.18 million profit.
The resulting deleveraging has been aggressive, with long liquidations accounting for nearly 78% of total wipeouts. Despite funding rates remaining biased to the long side, increased sell-side pressure could lead to further liquidity sweeps, indicating potential downside risks.
Ethereum’s monthly gains have outperformed major assets due to its undervaluation against Bitcoin. This price gap attracted smart money, fueling a rebound in the ETH/BTC ratio. However, weekly charts show a drop of nearly 11% in ETH/BTC, indicating weakening relative strength as Bitcoin approaches new all-time highs.
If whales continue to take profits and shift funds into BTC, Ethereum could enter a broader capitulation phase, increasing downside risk.
— new from AMBCrypto