TL;DR
- Open interest in Bitcoin perpetual futures has surpassed 310,000 BTC, with funding rates approaching 11%.
- A long-term investor swapped 22,400 BTC for ETH on Hyperunit, pushing Ethereum to an all-time high of $4,956 and raising the ETH/BTC ratio above 0.04.
- BTC dominance remains at 58.6%, while institutional flows reduce exposure to Bitcoin and favor ETH through futures premiums and ETF inflows.
Bitcoin faces a complex scenario driven by a sharp rise in leverage in perpetual futures and a capital rotation toward Ethereum that shifted market momentum.
According to K33, open interest in BTC derivatives exceeded 310,000 BTC, equivalent to roughly $34 billion, the highest level in two years. Over just two months, more than 41,000 BTC were added, with a weekend spike of 13,472 BTC marking a potential turning point. This surge coincided with annualized funding rates climbing from 3% to nearly 11%, signaling increasingly aggressive long positions in a period of relatively stagnant prices.
Vetle Lunde, Head of Research at K33, warned that this setup resembles the leverage build-ups seen in 2023 and 2024, which ended in sharp liquidations in August. Unlike those episodes, the current peak occurred later in the month, suggesting a more prolonged consolidation period and elevated risks for those buying on dips.
Pressure on Bitcoin intensified due to an unusual transfer into Ethereum. A long-term investor swapped 22,400 BTC on the decentralized platform Hyperunit, pushing ETH to a new all-time high of $4,956 and ending a 1,380-day correction. The move raised the ETH/BTC ratio above 0.04 in 2025, although over one- to three-year horizons, Ethereum still underperforms Bitcoin.
Key Difference in Bitcoin Dominance
ETH all-time highs have historically coincided with the late stages of bull cycles. In 2017 and 2021, Ethereum broke previous levels, altcoins surged, and Bitcoin stagnated due to weaker demand. The current debate centers on whether this pattern will repeat. A key difference is that BTC dominance remains at 58.6%, well above the sub-40% levels recorded in previous peaks, weakening the case for widespread speculative excess.
Meanwhile, institutional flows show caution. CME traders have reduced BTC exposure, and options markets exhibit defensive positioning in longer-dated contracts for the first time since 2023. In contrast, ETH futures trade at double-digit premiums, supported by sustained ETF inflows and corporate treasury purchases. The question now is whether Ethereum’s relative strength signals a broader cycle shift or if this rally will remain an isolated event
