Bitcoin vs Ethereum: Which Will Offer the Strongest Returns in the January Rally?

As the new year kicks off, a major shift is underway in the crypto market. Fresh capital is pulling away from Bitcoin [BTC], as uncertainty looms after its recent crash.

As 2023 begins, a major shift is occurring in the crypto market. Fresh capital is moving away from Bitcoin (BTC) due to uncertainty following its recent crash. Investors are hesitant, unsure of what the future holds.

However, amidst the ongoing macroeconomic turbulence, particularly concerns about a looming debt crisis in the U.S., fears are rising that the Bitcoin cycle of 2022 could repeat itself.

In the thick of it all, Ethereum (ETH) is gaining serious traction. Its strong historical performance in January is catching the attention of many investors.

As Q1 approaches and the market continues to shift, the question remains: Which crypto will offer the strongest returns in 2023 – Bitcoin or Ethereum? It's time to weigh your options and decide where to place your bets.

Ethereum/Bitcoin January rally in focus

According to historical trends, Q1 is usually a strong quarter for crypto. While Bitcoin tends to grab the headlines, Ethereum has consistently outperformed with stronger price gains.

Around mid-January, the ETH/BTC pair typically sees a series of green candlesticks, often indicating a surge in capital inflows by February. This year, Ethereum soared by 85%, reaching $4,087 by mid-March.

But it's not just the charts that matter. Mid-January is also a critical time for governments as they finalize their annual budgets. And this year, the stakes are higher than ever.

With the new administration planning to tackle a whopping $7 trillion debt and cut spending, the pressure is on. Add to that the growing debate over raising the debt ceiling, and we're in for a volatile mix.

In short, the government's approach to addressing its debt could create even bigger financial challenges down the line.

But will Bitcoin emerge as a safer bet?

It's a high-stakes gamble. Bitcoin's recent drop from its ATH of $108K to $92K signals a tough market environment, with investors staying cautious.

Retail FOMO is on hold – unless a significant dip sparks a buying frenzy. Now, it's up to the big players to drive a supply shock.

With 2025 shaping up to be volatile, the answer seems clear: Bitcoin may not be the safe bet just yet.

What adds more uncertainty is Bitcoin's long-term holder (LTH) control, which has dipped to 62.31%. In contrast, Ethereum's LTH stands strong at 75.06%.

Bitcoin's LTH percentage has been slipping since March, when BTC hit $73K, continuing to fall even after new ATHs.

Meanwhile, Ethereum has been on a steady uptrend, with its LTH control growing in tandem with its rally to $4K. The message is clear: Ethereum's long-term holders are confident and committed.

This shift is crucial for one key reason: Retail investors often turn to LTH metrics as a sign of market confidence. Ethereum's growing LTH base is a strong indicator of stability.

When you factor in Ethereum's solid historical performance in January and its strengthening long-term holder support, it's clear that Ethereum is poised to take the lead, potentially leaving Bitcoin behind.

But the true catalyst is still to come. Stay alert during this high-stakes month. It could set the stage for a year of big moves and even bigger opportunities for your portfolio.