Ethereum Outpaces Bitcoin as Capital Rotation Gains Pace

Ethereum rose 7.12% in March 2026, outperforming Bitcoin’s 1.83% gain. Over the same period, Ethereum’s market capitalization increased by 2.97% while Bitcoin’s market value declined by 0.43%, indicating a shift in capital toward Ethereum. Ethereum also exhibited higher realized volatility, reaching 62.8% versus Bitcoin’s 49.8%.

Ethereum gains momentum with price and activity growth

Market data for March 2026 showed investors favoring assets with stronger short-term movement. Ethereum’s monthly performance was accompanied by rising network activity, with active addresses increasing during the period.

Analysts said Ethereum “responded faster to liquidity changes during March,” aligning the price advance with broader market participation.

Cause: capital rotation and liquidity response

Ethereum advanced over Bitcoin as capital shifted across crypto markets. The data pointed to stronger price gains and rising activity on Ethereum, while Bitcoin’s weaker market value performance suggested slower capital inflows.

As one analyst put it: “ETH currently benefits from simultaneous capital inflow, supply tightening, and ecosystem growth. This positions Ethereum as a structurally stronger asset in the current phase.”

Development: volatility and exchange outflows

Ethereum’s realized volatility reached 62.8%, compared with Bitcoin’s 49.8%, signaling sharper price reactions to market conditions. Despite this divergence in movement, Ethereum maintained a correlation with Bitcoin near 0.94, though Ethereum’s larger short-term swings supported its use in faster trading strategies.

Exchange outflows for Ethereum increased during the period, suggesting reduced selling pressure. The trend was reflected in lower exchange balances, which analysts interpreted as stronger holding behavior among participants.

Data and network indicators

Ethereum network activity expanded alongside rising active addresses, indicating broader engagement across applications and services. Analysts linked the increase to growth in decentralized finance (DeFi) and tokenization demand.

In addition, the Coinbase Premium Gap for Ethereum remained negative but improved over time, which analysts described as a gradual return of demand from U.S. investors and a steady recovery in regional trading flows.

Impact and ecosystem drivers

Stablecoins and DeFi activity supported Ethereum’s ecosystem growth during March 2026. Real-world asset tokenization also gained traction on the network, reinforcing Ethereum’s role as a financial infrastructure layer as capital rotated within the crypto market.