Following its first historic high since 2021 last Friday, Ethereum continued to reach new peaks over the weekend. On Sunday afternoon, the world's second-largest cryptocurrency soared to a high of $4,954.81. The latest price shows a gain of less than 1%, trading at $4,776.46.

Meanwhile, Bitcoin erased all gains from Friday's rally, dropping to $110,779.01 at one point, marking its lowest level since July 10. The cryptocurrency had reached an all-time high of $124,496 on August 13.

Last Friday, cryptocurrencies surged alongside broader markets after Federal Reserve Chairman Jerome Powell hinted at imminent rate cuts. Ethereum jumped 15% while Bitcoin gained 4%.

Ethereum, rather than Bitcoin, has led cryptocurrency markets for several consecutive weeks, benefiting from favorable regulatory policies, heightened market interest in stablecoins, and substantial purchases by a new cohort of Ethereum holders.

According to cryptocurrency data provider Arkham, Wall Street crypto bull Tom Lee's Bitmine Immersion Technologies purchased $45 million worth of Ethereum on Saturday.

Since 2021, Ethereum has repeatedly tested resistance levels unsuccessfully, but successfully held above the $4,000 level this month.

Ben Kurland, CEO of cryptocurrency research platform DYOR, stated: "Buyers have finally outscaled sellers. Ethereum exchange-traded funds (ETFs) continue to attract capital inflows, and public companies are beginning to view Ethereum as a reserve asset for yield generation—this form of demand is more sticky than retail speculation."

He added: "Additionally, nearly one-third of the supply is locked in staking, scaling solutions have matured, and capital costs are declining as rate cuts return to the agenda. These factors have transformed $4,000 from a resistance level into the foundation for Ethereum's next phase of repricing."

**Bitcoin vs Ethereum**

Powell indicated last Friday that the Federal Reserve would "consider changing our policy stance," suggesting rate cuts may come soon. He pointed to stable unemployment rates and optimistic economic data as key factors for reducing borrowing costs. However, inflation remains a concern following President Donald Trump's tariff policies.

Markets widely expect the Fed to cut the benchmark rate by 25 basis points at next month's meeting, which would be the first U.S. rate cut this year.

Powell's remarks triggered strong reactions in cryptocurrency markets. Bitcoin initially surged from $112,000 to $117,000 before retreating. Ethereum was the real star of Friday's rally, jumping 15% in less than three hours.

Additionally, Solana, Dogecoin, Cardano, Sui, Avalanche, and Polkadot all gained over 10%, indicating heightened interest in high-risk assets.

Recent price movements reveal an intriguing phenomenon in cryptocurrency markets: Ethereum now appears more popular than Bitcoin. Both assets trade as ETFs on Wall Street. According to SoSoValue data, Bitcoin funds experienced $23 million in outflows last Friday, while Ethereum funds saw $337.6 million in inflows.

Analysts believe ETFs have played a significant role in dampening Bitcoin's volatility, making smaller cryptocurrencies more attractive to traders seeking short-term returns.

Vivek Raman, founder of Etherealize, commented: "For many traders, the Bitcoin trade is over. Ethereum appears underweight, more volatile, and more reactive."

Bitcoin supporters strongly dispute this view, with many confidently predicting Bitcoin will steadily progress toward $1 million in coming years, eventually surpassing gold's market capitalization. This would represent an 769% increase from current levels, and they argue Bitcoin remains in its early stages with significant upside potential.

Given that financial companies are now accumulating Bitcoin faster than it can be mined, supporters believe Bitcoin's current value doesn't reflect the true supply shortage situation.