Bitcoin and Ether Stage Strong Rally Amid Sentiment Shift
Published on: Thursday, 26 February 2026
Author: Axel Rudolph, Market Analyst
Overview
Bitcoin (BTC) and Ether (ETH) have experienced a significant rally, reversing a previous downtrend and surprising a cautious market. This surge is attributed to renewed institutional inflows, improved market sentiment, and a reset in positioning dynamics.
Key Drivers of the Rally
ETF Inflows
The rally was primarily driven by renewed inflows into spot exchange-traded products (ETFs), with Bitcoin rising approximately 6% and Ether nearly 11% on a single day. This influx of capital indicates a shift from tactical trading to more strategic positioning by institutional investors.
Positioning Reset
In the weeks leading up to the rally, derivatives data showed a reset in leverage, with funding rates stabilizing and open interest normalizing. This created a conducive environment for a cleaner upward movement in prices, leading to a squeeze of short positions as prices approached key resistance levels.
Technical Analysis
Bitcoin
Bitcoin's resistance levels are identified between $70,040.75 and $73,757.39. A daily close above the March 2024 peak at $73,757.39 could lead to further upward momentum towards the April 2025 low at $74,441.
Ether
For Ether, major resistance is found between $2,095.58 and $2,152.44. A daily close above the February 2025 low at $2,149.30 could signal a bullish trend, potentially pushing prices back towards the $2,000 mark.
Macro Sentiment
The macroeconomic backdrop has improved, with expectations of a potential easing of US Federal Reserve monetary policy, which has positively influenced risk appetite across various asset classes. This has allowed investors to re-engage with cryptocurrencies, with Bitcoin attracting initial inflows and Ether subsequently outperforming.
On-Chain Data and Narrative Momentum
On-chain indicators support the rally's credibility, as exchange balances for both Bitcoin and Ether have not surged, indicating that long-term holders are not distributing their assets. Additionally, ongoing institutional adoption and developments in Ether's infrastructure have strengthened the narrative around both assets.
Correlation Patterns
The correlation between Bitcoin and Ether has been notable during this rally, with Bitcoin often leading the moves and Ether following, sometimes outperforming as confidence spreads in the market.
Conclusion
The recent rally in Bitcoin and Ether reflects a combination of institutional inflows, improved positioning, technical breakouts, and a more favorable macro environment. Whether this marks the beginning of a sustained uptrend or a temporary relief rally will depend on the consistency of inflows and the ability to break through resistance levels.