Ethereum's uptrend and Bitcoin's decline have both contributed to a more volatile market environment. Investors are now focusing their attention on Ethereum, as Bitcoin has notably retreated. Meanwhile, companies in the broad-based S&P 500 index are expected to see further gains after recent record highs.

The crypto market opened the week deeply in the red after a major BTC holder triggered mass liquidations amid a large-scale sell-off. This has cast doubt on Bitcoin's prospects for a September rally. Historically, September has always been a "bearish" month for BTC. The odds are that history will repeat itself, especially as crypto whales are shifting to Ethereum, pushing BTC back down to support at $112,000.

Increasing buying volume has strengthened Ethereum's position, while Bitcoin, by contrast, has trended lower. The driver behind this was the move of a major crypto whale, who placed 22,769 BTC ($2.59 billion) on Hyperliquid, then bought 472,920 ETH spot ($2.22 billion) and opened a position on 135,265 ETH ($577 million). The scale of this action immediately drew the market's attention to Ethereum, raising the question of whether the second-largest cryptocurrency might soon eclipse the first (BTC).

Choosing between Ethereum and Bitcoin

In these circumstances, interest in ETH futures on CME has surged, indicating broad participation by professionals and a modest decline in retail trading. At the same time, investor interest in Bitcoin has declined as its recent price action was far less convincing than Ethereum's. Analysts believe Bitcoin has now entered a consolidation phase.

Nevertheless, it is too early to say that Ethereum is stepping out of Bitcoin's shadow. However, a combination of whale confidence, institutional activity, and bullish technical signals has given Ethereum an advantage in current market dynamics. If the momentum continues, Ethereum is likely to maintain its upward trend, leaving Bitcoin to consolidate while the market tests the extent to which ETH can advance.

Bitcoin reaches peak of difficulty

Technically, Bitcoin's rebound from the $111,000 mark at the start of August failed to gain traction. Late-summer retracement drove BTC up by 10%, to $123,000, but bulls only managed another 3.27% rise. This triggered a deep correction, stalling at late long positions, and the price fell back to $110,000. On Tuesday, August 26, Bitcoin was trading at $110,030, unsuccessfully trying to move higher.

The weekend's mass sell-off pushed BTC back to the critical $113,000 support zone, with over $846 million in longs liquidated—mainly those who bet too early on a BTC rally. Subsequently, Bitcoin climbed to $113,491, but then dropped to a low of $110,584, a 0.92% daily loss and over 2% down in 24 hours. Briefly, BTC broke through the psychological $110,000 mark, but quickly bounced back before algorithmic traders began large-scale sales.

As a result, Bitcoin lost 3% in August, while Ethereum gained 25%. In September—a historically bearish month for BTC—and in view of the upcoming FOMC meeting, capital continues to favor Ethereum. According to analysts, current trends point to falling confidence in BTC. Active capital rotation is laying the groundwork for a "bearish" September for Bitcoin. However, BTC bulls can still find support in exponential moving averages, and Bitcoin's trend remains bullish in the long term.

Ethereum's situation is also complex; the asset has been riding a rollercoaster. On Sunday, ETH reached a new all-time high at $4,946, but later traded 10% below that level. After major volatility and a surge to $4,800, ETH settled slightly above $4,400. The sharp pullback from the $4,800 resistance zone suggests many traders locked in profits right after the new ATH. Despite this, the overall outlook for ETH remains bullish.

Ethereum is also supported by the fact that the lion's share of revenue is now being allocated into this token. Traders purchased $2 billion worth of ETH and speculated with another $1.3 billion, confirming significant shifts in virtual money flows.

S&P 500 index: promising prospects

In light of these developments, Jefferies' currency strategists have raised their full-year forecast for the S&P 500 index to 6,600 points. High corporate earnings in Q2 2025 and reduced concerns about the US economy have fueled analyst optimism. Previously, Jefferies had forecast 5,600 points—the only estimate below 6,000 at the time.

Other major brokerage firms—UBS, Citigroup, and HSBC—have also raised their targets amid improved market sentiment. Leading S&P 500 companies focused on artificial intelligence and shares from the "Magnificent Seven" (G7) have shown significant growth. Moreover, the financial sector as a whole has demonstrated resilience, suggesting a benign macroeconomic backdrop.

Jefferies is also forecasting a nearly 10% increase in S&P 500 earnings per share to $267, supporting the outlook for solid earnings growth. The company's analysts reaffirm their forecast of three additional Fed rate cuts in 2025, starting in September, citing Fed Chair Jerome Powell's more cautious comments at Jackson Hole.

Despite growing broker optimism, companies from different sectors still see tariffs as a drag on earnings and profitability. Still, the impact of these tariffs appears less significant than in the previous quarter, thanks to cost-control measures and more efficient logistics.