Ethereum liquidity is rising – Could ETH steal Bitcoin’s spotlight in Q4?

Are investors playing it safe rather than taking risk?

Bitcoin closed August over 25% higher compared to the previous month, recording its best monthly performance since November 2024. However, the stablecoin market cap only managed to grow by 0.5% and failed to hold above $310 billion, which suggests that the inflow of liquidity is happening at a slow pace.

The same pattern is evident on the on-chain level. As the chart below shows, Bitcoin rose by around 45% from its recent low, but there is a lack of spot demand, as evidenced by the 90-day CVD being neutral. Liquidity across exchanges is also weak, as seen in Binance’s stablecoin reserves, which dropped nearly $7 billion from their cycle peak above $50 billion. 

So, while Bitcoin’s technical structure has turned bullish, liquidity and spot demand remain muted. At the same time, rising Open Interest suggests growing speculative positioning, which makes BTC vulnerable to a long squeeze if $80k resolves as the ceiling, especially with the FOMC meeting approaching.

However, the bigger signal may be the growing liquidity divergence between Bitcoin and Ethereum. If capital continues to rotate towards ETH and away from BTC, this could set up the conditions for altcoins to outperform Bitcoin in the coming Q4, particularly as macro volatility drives risk appetite shifts.