Ethereum (CRYPTO: ETH) has outperformed Bitcoin (CRYPTO: BTC) in several key metrics over the past week, signaling a potential shift in market dynamics, according to a Bybit and Block Scholes report.

What Happened: This trend comes amid the announcement of SEC Chair Gary Gensler‘s planned departure in January 2025, which has boosted sentiment around Ethereum and other altcoins.

The report highlights Ethereum’s strength in futures and perpetual markets. Bitcoin futures open interest has declined, while Ethereum futures have seen growth.

Short-dated ETH futures contracts are trading at a steep premium, with one-week contracts showing nearly 25% annualized yields over spot prices.

This development reflects growing trader optimism toward Ethereum.

“ETH has sustained its outperformance over the week,” the report states, emphasizing the stark contrast in sentiment and positioning between the two largest cryptocurrencies.

Ethereum perpetual contracts also saw rising open interest, while Bitcoin perpetuals recorded declines.

These trends suggest traders are increasingly shifting their focus toward Ethereum.

Options market activity further supports this narrative, with Ethereum’s options term structure showing inversion, indicating higher demand for short-term bullish bets.

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By contrast, Bitcoin’s term structure has flattened, suggesting cooling speculative interest.

The report connects these developments to broader market conditions, including regulatory tailwinds.

Gensler, known for his stringent stance on crypto regulation, is set to step down as SEC Chair early next year. Many assets, particularly altcoins like Ethereum, faced scrutiny during his tenure.

The announcement of his departure is seen as a positive signal for the crypto market, boosting confidence in Ethereum’s longer-term prospects.

“Ethereum’s outperformance this week reflects not just favorable market conditions but also a broader shift in sentiment as regulatory pressures ease,” an analyst from the report commented.

The report further notes Ethereum’s growing potential to attract institutional inflows, a trend observed with Bitcoin during its ETF-related surges.

However, it cautions against extrapolating short-term trends too far, as both Ethereum and Bitcoin remain sensitive to macroeconomic factors and market volatility.

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