The recent Bitcoin (BTC) rally, fueled by historic Bitcoin ETF inflows in the United States, is generating optimism but also serious doubts about its sustainability. According to analyst Hongji Feng, although institutional capital has bolstered the price, there are signs of exhaustion in the market that investors should not ignore.
Over the past week, spot Bitcoin exchange-traded funds (ETFs) posted an impressive record. Positive net flows were reported at $3.24 billion. This figure represents the strongest capital inflow over a seven-day period in 2025, reflecting renewed institutional interest amid the fiscal uncertainty affecting the global economy.
Is BTC Dominance a Warning Sign?
Despite Bitcoin’s solid performance, the rest of the cryptocurrency market is not sharing the same momentum. In fact, a clear capital rotation from altcoins to Bitcoin is evident. Major assets like Ethereum, Solana, and Cardano are showing intraday price declines, suggesting that the current rally is almost exclusively concentrated in the leading crypto asset. This divergence could indicate a fragile foundation for the rally.
Analytics platforms like LunarCrush confirm this trend, reporting a decrease in search interest and social engagement for most cryptocurrencies, with the notable exception of Bitcoin. This lack of market breadth is a warning sign, as a rally sustained by a single asset is inherently more vulnerable to sharp reversals.
A Market Reliant on Institutional Capital
The analysis of derivative markets also provides cautionary signals. Open interest has plateaued, and funding rates for perpetual contracts are compressing. This suggests that traders’ directional conviction is waning. If large ETF buyers are trading tactically rather than making long-term structural allocations, selling pressure could emerge just as quickly as the buying appeared.
The current situation leaves Bitcoin at a crossroads. While Bitcoin ETF inflows have been a powerful catalyst, the overall health of the market appears precarious. Without new positive catalysts or broader participation that includes altcoins, the upward momentum risks fading, opening the door to a significant correction in the near term.
