• In quarter 2 of 2025, Ethereum beat Bitcoin in percentage gain.
• Crypto analyst Merlijn The Trader marked the start of the “Phase 2: Ethereum,” in which the capital is rotating out of Bitcoin and into Ethereum.
• The ETH/BTC chart is mimicking the same trend that occurred in 2020, and this is a potential altseason since the strength of Ethereum is rising

Crypto analyst Merlijn The Trader notes that investors are currently depositing more funds into Ethereum (ETH) than Bitcoin (BTC), which, according to the analyst, indicates a so-called capital rotation within the crypto market. 

This change was more pronounced during the second quarter of 2025, when ETH overshadowed Bitcoin in a major way. As much as Bitcoin rose by 30.5% in the second quarter, Ethereum rocketed by 51.87%, making it look like the market is shifting focus to ETH.

Merlijn explained that this marks the beginning of what he called “Phase 2: Ethereum,” in a market cycle model. The model describes four phases: Phase 1 focuses on Bitcoin dominance when most capital flows into BTC. 

Source: X @MerlijnTrader

In Phase 2, money begins moving into the leading altcoin, which starts outperforming Bitcoin. This is followed by Phase 3, where large-cap altcoins (other than ETH) start gaining traction. Finally, Phase 4, known as “altseason,” is when money flows into smaller altcoins and meme coins, often leading to explosive but short-lived rallies.

Supporting this view, the quarterly return charts from Coinglass show that while Bitcoin had a tough Q1 in 2025, dropping by -11.82%, it recovered in Q2 with a +30.5% gain. Ethereum, however, had an even more impressive comeback. 

After falling -45.41% in Q1, it rebounded with +51.87% in Q2. This strong performance difference suggests that investors are shifting their funds from Bitcoin into Ether.

Merlijn also pointed to the ETH/BTC chart, which tracks how ETH is performing against BTC directly. He noted that the chart had just confirmed a major move similar to what happened in 2020—right before a huge altseason. 

The chart he shared showed that in early 2020, money had rotated from BTC to ETH, followed by an altcoin boom.  Then, in 2022, the money moved back into Bitcoin. Now, in mid-2025, the chart shows a new green signal indicating another rotation from BTC to ETH, suggesting a possible repeat of the 2020 pattern.

Source: X @MerlijnTrader

He emphasized that Ethereum’s momentum is building and warned not to ignore the signal. With ETH gaining strength and outperforming Bitcoin, Merlijn suggested that the ETH narrative is heating up and that a broader altcoin season could be right around the corner. 

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