BTC and ETH Rally Together — The Shift Driven by $7.5B in ETF Volume

Bitcoin and Ethereum, the two pillars of the crypto market, are continuing their joint rally, bolstered by strong institutional capital inflows. After touching the $79,000 mark and demonstrating significant buying pressure, Bitcoin has entered a consolidation phase. Ethereum, meanwhile, has been showing relative strength against Bitcoin over the past two months, leading the overall market's upward momentum. Notably, the combined daily trading volume of U.S. spot ETFs for both assets exceeding $7.5 billion is a key signal that substantial institutional capital inflow is now in full swing.

Although there was a temporary price correction over the weekend due to large-scale liquidations as excessive leverage was cleared from the futures market, the accommodative liquidity environment—such as the U.S. Treasury's expanded bond buyback program—continues to form a solid support base. In this analysis, we examine the structural market changes brought about by record ETF inflows and macroeconomic catalysts. We also share key technical levels and scenario-based responses to focus on ahead of the Jackson Hole meeting, which will serve as the debut stage for the new Federal Reserve Chair.

The Growth Engine Built by Liquidity Provision and Institutional Inflows

The recent strong joint rally in Bitcoin and Ethereum is closely tied to changes in the global liquidity environment. The most critical driver is the U.S. Treasury's decision to double its long-term bond buyback program to $4 billion per cycle, injecting liquidity into the market. This move has lowered Treasury yields and stimulated investment demand to hedge against currency devaluation, significantly increasing the appeal of Bitcoin and Ethereum as premier scarce assets. In essence, these macroeconomic easing signals have served as a catalyst for risk-on sentiment across the market.

These macroeconomic shifts are directly translating into real institutional capital inflows. Over the past week, U.S. Bitcoin spot ETFs saw a massive net inflow of $1.9 billion, while Ethereum spot ETFs recorded a solid net inflow of $697 million. Notably, the Coinbase premium index—which represents actual buying pressure from U.S. institutional investors—turned positive for the first time in 97 days, providing definitive proof that this rally is backed by strong institutional capital rather than mere speculative demand from retail investors.

Additionally, the distinct relative strength of Ethereum, which had been overshadowed by Bitcoin, is worth noting. The ETH/BTC price ratio has surged by about 25% over the past two months, indicating that capital is also rotating into Ethereum. With the growth of the asset tokenization market and concrete legislative moves toward regulatory clarity, there is growing expectation within the market that Ethereum could lead this current upward phase. However, given the impact of weekend futures market liquidations and the upcoming Jackson Hole meeting, the possibility of a market breather cannot be ruled out. Therefore, it is a time for managing volatility rather than chasing aggressive buys.

Short-term Overheat Signals and Key Watchpoints Before and After Jackson Hole

Bitcoin and Ethereum are currently maintaining a very strong upward trend on daily charts. As buying pressure has concentrated in a short period, technical indicators are signaling that the market has entered an overheated state. However, because trend-strength indicators are still pointing upward, it is reasonable to view this not as a precursor to a sharp reversal, but rather as part of an extension of the current rally. This is because the $1.9 billion inflow into Bitcoin spot ETFs and $697 million into Ethereum spot ETFs over the past week provide a strong floor of institutional demand for prices.

However, one must prepare for potential short-term volatility. The recent weekend liquidation of $1.71 billion in excessive leverage positions in the futures market serves as a warning that market resilience could be temporarily shaken. Furthermore, with the Jackson Hole meeting approaching, which will feature the debut speech of new Federal Reserve Chair Kevin Warsh, we may see a rise in wait-and-see sentiment to avoid macroeconomic uncertainty. Consequently, a period of consolidation is highly likely before any further significant upside.

The key benchmark for gauging the market's future direction depends on whether Bitcoin can stably maintain the $77,000 level it recently broke through. If it confirms strong support at this level and sustains its upward trend, we can look forward to a positive scenario where the market attempts to break past the previous high of $79,500 following the resolution of uncertainty after the Jackson Hole meeting. Conversely, if disappointment selling occurs around the speech and the price drops below the short-term 20-day moving average on a daily closing basis, this rally may lose steam, likely leading to a period of range-bound consolidation. Therefore, investors are advised to approach the market calmly, prioritizing confirmation of support levels over reckless chasing.