Ethereum’s recent price movement is fueling optimism about an incoming “alt season,” according to a new CryptoQuant report.
The ETH/BTC Market Value to Realized Value (MVRV) ratio—a key indicator measuring Ethereum’s valuation relative to Bitcoin—has dropped to levels not seen since 2019, signaling that ETH is currently undervalued compared to BTC.
Historically, such low MVRV readings have preceded strong rallies for Ethereum, with the token often outperforming Bitcoin by a wide margin.
This undervaluation appears to be catching the attention of investors, as data shows a sharp increase in demand for ETH ETFs. Since late April, the ETH/BTC ETF holdings ratio has climbed significantly, reflecting growing institutional confidence in Ethereum’s potential to outperform Bitcoin. Factors such as the recent Pectra upgrade and a potentially improved macroeconomic backdrop may be driving this shift.
The ETH/BTC price ratio has already bounced back about 38% from its lowest point since early 2020, suggesting many investors believe the worst is behind them and that an altcoin rally could be on the horizon.
Market insiders echo this outlook. March Zheng, General Partner at Bizantine Capital, notes that Ethereum typically acts as the bellwether for risk appetite in the crypto market, and its strong upward moves often signal a broader rally across altcoins.
On-chain metrics back this bullish view. Ethereum’s spot trading volume relative to Bitcoin hit 0.89 last week—the highest since August 2024—mirroring trends seen during 2019-2021 when Ethereum surged ahead of Bitcoin by several times.
Additionally, ETH deposits on exchanges, which can indicate selling pressure, have fallen to their lowest relative level since 2020, suggesting that investors are holding ETH in anticipation of price gains.
However, a decisive breakout is still needed: ETH must surpass its 365-day moving average against BTC to confirm the upward trend.
While Ethereum’s undervaluation, rising institutional interest, and reduced selling pressure are promising, CryptoQuant cautions that the network’s usage metrics still lag. Without increased adoption and higher on-chain activity, Ethereum’s price rally may face limitations.
