A political scare, a wave of forced liquidations, and one sharp bounce put Ethereum ahead of Bitcoin for a day. Longer timeframes tell a different story, and the next price levels will reveal which one holds.
The Crypto Desk desk. Editor: Sam Daodu.
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Ethereum (CRYPTO: ETH) has risen by 6.9% in just 24 hours, with its current price at $2,419. In comparison, Bitcoin (CRYPTO: BTC) has risen 4.7% to $80,495. This rebound makes ETH the top performer of the two leading cryptocurrencies.
This upward move follows a challenging month for Ethereum, which fell 16.6% in the 30 days leading up to November 4. During that time, ETH fluctuated between $2,227 and $2,443, leaving it 51.2% below its peak of $4,946. So, is Ethereum genuinely outperforming Bitcoin, or is this just a brief spike?
Ethereum Recovers After a Midterm Election Scare
The recent bounce can be traced back to the political landscape in Washington. Following the midterm elections, Democrats gained control of both houses of Congress, prompting a sell-off in crypto markets. The election results raised concerns that the industry’s push for friendlier federal crypto rules could face new hurdles.
Despite the initial turmoil, both crypto and stock markets rebounded. U.S. stock futures recovered from an overnight decline, and cryptocurrencies followed suit, suggesting that this rally goes beyond politics alone. Bitcoin even hit a six-week low before recovering, pointing to a broader relief bounce across risk assets, the investments traders sell first during times of uncertainty.
Retail interest grew as well. Wikipedia’s Ethereum page drew 6,847 views in the latest week, an 81% increase from the previous week. Spikes in attention like this usually follow sharp price moves, so while it shows curiosity, it doesn’t prove that new money is entering the market.
A Short Squeeze Fueled Part of ETH’s Gain
According to CoinGlass, exchanges liquidated about $238 million worth of ETH positions in a single day, with 55.5% of them short positions, trades that profit when prices fall. Each forced closure leads exchanges to buy ETH, driving the price up and triggering the next short position in line.
Traders call this chain reaction a short squeeze, and it could explain part of ETH’s larger gain compared to Bitcoin. A coin with more short positions stacked against it has more fuel for a jump like this once the price turns.
That fuel runs out quickly, though. Forced buying stops once the short positions clear, and CoinGlass data shows that long positions, trades that profit when prices rise, got closed out too. A lasting rally needs spot buyers, investors purchasing ETH outright, to replace the forced buying.
Ethereum Wins the Short Run, but Bitcoin Leads Over the Long Run
Ethereum held up better over the week even before the rebound. From October 28 to November 4, ETH fell 4.1%, while Bitcoin dropped 5.4%.
However, Bitcoin still holds a significant advantage over longer time frames. Over the past month, ETH declined 16.6%, while Bitcoin fell only 10.4%. Year to date, ETH is down 23.8% compared to Bitcoin’s 12.1% decline. Even over 90 days, Bitcoin’s 19.6% gain outpaced ETH’s 18.8%.
Ethereum has a smaller market than Bitcoin, so its price swings tend to run sharper in both directions. The bigger drop in ETH set up the bigger rebound, but one strong day doesn’t show a lasting shift in demand.
Can Ethereum Hold Its Lead Over Bitcoin?
Ethereum is outperforming Bitcoin on the daily and weekly numbers, but Bitcoin still leads on every longer window, from one month to one year. For Ethereum’s rally to continue, fresh buying interest needs to arrive once the short positions clear, with no help from a political environment that now looks tougher on crypto.
ETH last traded as high as $2,524 in the week starting October 25 and hasn’t returned to that level since. On the downside, $2,227 marks the bottom of the recent trading range.
If ETH clears $2,524 while Bitcoin falls behind, that could point to demand beyond the short squeeze. If ETH slips back below $2,227, the squeeze was likely driving most of the rally, and Bitcoin’s longer-term lead could stay intact.
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Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
