Ethereum (ETH) has found itself in a surprisingly rare territory, with market signals suggesting it’s notably undervalued compared to its crypto sibling, Bitcoin (BTC). According to a fresh analysis by CryptoQuant, the ETH/BTC Market Value to Realized Value (MVRV) metric—a crucial barometer of market sentiment and historical trading behavior—has hit lows not seen since 2019. This dip has often heralded significant gains for ETH, outstripping BTC in performance, and it seems this time might be no different.
Institutional Eyes on Ethereum
In recent weeks, institutional investors have been pivoting their focus toward ETH. Data from CryptoQuant shows a sharp rise in the ETH/BTC ETF holdings ratio since late April, indicating that big players are betting on ETH to outpace BTC. This shift could be spurred by the Pectra upgrade or perhaps a broader, more favorable economic climate that’s beginning to take shape. As explored in Vitalik Buterin’s vision for Ethereum: Pectra, Glamsterdam and beyond, the Pectra upgrade is a significant milestone that could further bolster ETH’s appeal to institutional investors.
March Zheng, General Partner at Bizantine Capital, shared his insights with CoinDesk, underscoring ETH’s historical role as a leading indicator for altcoin rallies. “Traders should remember that ETH has typically been the main on-chain altcoin indicator for risk-on,” he remarked, hinting at a potential alt season on the horizon. The ETH/BTC price ratio has already bounced back 38% from its nadir in January 2020, reflecting a growing consensus that the bottom might be in.
Volume and Value: A Bullish Signal?
Adding to the bullish sentiment, ETH’s spot trading volume relative to BTC soared to 0.89 last week, the highest since August 2024. This surge suggests a renewed appetite for ETH among investors. A similar trading pattern was observed between 2019 and 2021, a period during which ETH dramatically outperformed BTC, multiplying its value fourfold. For more insights on trader sentiment, see our article on how Ethereum bulls show interest as traders’ confidence in ETH’s $1.8K level improves.
Further reinforcing this optimism, CryptoQuant highlights that ETH exchange deposits have plummeted to the lowest relative levels since 2020. This decline in deposits often signals reduced selling pressure, implying that investors are holding onto their ETH in anticipation of higher prices.
However, not everything is rosy. While the market signals a potential rally, ETH’s network activity remains a concern. Without a significant uptick in usage, the token’s price might struggle to sustain its upward trajectory. CryptoQuant’s previous reports have flagged this issue, suggesting that network utilization is a critical factor for ETH’s long-term price growth.
Looking Ahead: What’s Next for ETH?
The path forward for ETH appears promising, albeit with caveats. To truly capitalize on its undervaluation and institutional interest, ETH needs to decisively break above its 365-day moving average against BTC. This technical milestone would serve as a confirmation of the bullish momentum and could pave the way for substantial gains.
Still, questions linger. Can ETH sustain this momentum without a corresponding rise in network activity? Will macroeconomic conditions continue to favor digital assets, or could external factors disrupt this burgeoning rally? As the crypto market evolves, these uncertainties loom large.
For now, the scene is set for an exciting chapter in ETH’s journey. With institutional investors seemingly in its corner and historical patterns pointing to potential gains, Ethereum might just be on the cusp of a remarkable upswing. But as always in the volatile world of crypto, only time will tell if this is the dawn of a new alt season or just another fleeting moment of optimism.
Source
This article is based on: Undervalued Ether Catching Eye of ETF Buyers as Rally Inbound: CryptoQuant
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
