Bitcoin and Ether Surge as Institutional Inflows Return

The cryptocurrency market has seen a significant shift in sentiment over the past week, driven by renewed institutional inflows and improved risk appetite. Bitcoin (BTC) and Ether (ETH), two of the largest digital assets, have been at the forefront of this movement, experiencing strong rallies on Wednesday.

The rally in BTC and ETH was fueled by a combination of factors, including increased demand for spot exchange-traded products, which pushed prices higher. The return of sustained allocation from institutional channels has reinforced Bitcoin's role as the primary gateway for institutional crypto exposure, while Ether has benefited from spillover flows as investors diversify within large-cap digital assets.

Positioning dynamics also played a crucial role in the rally, with derivatives data suggesting that leverage had been reset and funding rates were moderating. This created conditions for a cleaner move higher, allowing prices to push above key technical resistance areas.

The correlation between BTC and ETH during the rally was notable, with Ether benefiting from improved risk appetite and higher beta characteristics once Bitcoin confirmed strength by rising to its major February resistance area. While momentum indicators have strengthened, derivatives markets have not yet returned to excessively stretched funding levels, suggesting that the advance reflects renewed demand rather than unsustainable leverage build-up.

However, sustainability questions remain, with a reversal in ETF flows or renewed tightening in liquidity capable of tempering enthusiasm.