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As the third quarter (Q3) of 2025 begins, cryptocurrency markets are shifting their gaze. While Bitcoin hovers near its all-time high (ATH), investor sentiment, historical data, and macroeconomic forces are painting a more cautious picture for the crypto giant. Meanwhile, Ethereum appears to be gaining traction, potentially setting the stage for a surprise breakout.
This evolving dynamic between the top two cryptocurrencies is catching the attention of analysts and traders alike. Could Ethereum outperform Bitcoin this quarter? Let’s explore the data, sentiment, and historical trends shaping this narrative.
Bitcoin Struggles With Investor Expectations
Bitcoin (BTC) has come tantalizingly close to breaking its ATH of $111,970 multiple times in recent weeks. As of now, it trades at $109,679, just 2.1% below that mark. However, this proximity to its peak may paradoxically hinder its progress.
According to Santiment analyst Brian Quinlivan, the crypto market often moves contrary to retail sentiment.
“We’re seeing an anticipation for Bitcoin’s next all-time high across social media,” Quinlivan said
in an interview with Cointelegraph. “Since markets move the opposite direction of retail’s expectations, this usually is a sign that we aren’t quite ready for another bullish surge yet.”
This is reflected in the Crypto Fear & Greed Index, which currently reads 72 – firmly in the “Greed” zone. Historically, such levels indicate a heightened risk of corrections rather than breakouts.
Quinlivan also noted that frustratingly close attempts at breaking ATHs can cause short-term impatience among retail investors, who may exit or rotate into other assets. This, in turn, may neutralize excessive optimism and later create the ideal conditions for an aggressive upswing—once the speculative froth subsides.
Q3: Bitcoin’s Weakest Quarter Historically
Bitcoin’s seasonal performance also supports the cautious outlook. According to CoinGlass data, Q3 has historically been Bitcoin’s weakest quarter, with an average return of just 6.03% since 2013. In stark contrast, Q4 has historically been the most bullish, with an average return of 85.42%.
Dr. Sean Dawson, head of research at Derive, emphasized that macroeconomic headwinds are likely to limit Bitcoin’s upside this quarter. Despite increasing political pressure, the Federal Reserve is expected to hold interest rates steady—a scenario that traditionally diminishes the appeal of risk-on assets like Bitcoin.
“There’s less incentive to chase volatile returns when the risk-free rate remains high,” Dawson said,
adding that this stagnation in monetary policy could suppress bullish momentum in Q3.
Additionally, 99.9% of traders expect no interest rate changes in the upcoming June 18 Fed meeting, as per CME’s FedWatch tool, which further solidifies the narrative of macroeconomic stagnation impacting Bitcoin.
Ethereum Gains Momentum in Background
While Bitcoin cools off under the weight of high expectations, Ethereum (ETH) seems to be quietly preparing for a move of its own. Since bottoming at $1,472 on April 9, ETH has steadily recovered to $2,793, representing a 90%+ rebound in just two months.
Quinlivan highlighted this as an example of Ethereum “playing catch-up” since the market began to recover in mid-April.
“More and more eyes have turned to Ethereum,” he added.
As Bitcoin struggles to generate fresh excitement, Ethereum may be attracting speculative capital as a high-upside alternative.
Ethereum’s fundamentals also appear stronger than ever:
- Layer 2 adoption has soared.
- Staking metrics remain solid with increasing ETH locked.
- Regulatory concerns surrounding Bitcoin ETFs may shift focus to Ethereum ETF developments.
This renewed focus could make Ethereum the real star of Q3 if market conditions stay as predicted.
Could Ethereum Lead the Next Rally?
Given Bitcoin’s potential stagnation and Ethereum’s surging interest, Q3 might serve as a pivot point in market leadership. Ethereum historically lags Bitcoin during the early stages of bull cycles but tends to outperform during consolidation phases and altcoin seasons.
The ETH/BTC trading pair is closely watched by analysts to gauge when altcoins will start to outperform. Any significant upward momentum in this pair would be a strong indicator of Ethereum—and perhaps the broader altcoin market—taking the lead.
With Ethereum ETFs, institutional adoption, and upgrades like Proto-Danksharding (EIP-4844) on the horizon, the conditions seem ripe for ETH to stage an impressive Q3 performance.
Conclusion: A Tale of Two Coins
Q3 2025 may well become the quarter where Bitcoin pauses and Ethereum accelerates. From historical performance and social sentiment to macroeconomic uncertainty and Ethereum’s recovery, the pieces are falling into place for a shift in crypto market dynamics.
Investors may want to temper expectations for Bitcoin’s immediate upside and consider Ethereum’s potential as the narrative flips in its favor. While BTC remains the digital gold standard, Ethereum’s flexibility and utility continue to draw capital and innovation—especially when Bitcoin fatigue sets in.
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