CryptoQuant: Undervalued Ether Gains Interest from ETF Investors Before Rally

Ethereum is showing signs of a potential breakout, sparking investor hopes for a new “alt season,” according to the latest insights from CryptoQuant.

The ETH/BTC Market Value to Realized Value (MVRV) ratio—a metric that compares Ethereum’s market value against its realized value relative to Bitcoin—has recently hit levels rarely seen since 2019. This deep undervaluation suggests Ethereum could be poised for a strong comeback versus Bitcoin.

Historically, when this MVRV metric drops this low, Ethereum has tended to outperform Bitcoin significantly in the following months.

Supporting this thesis, institutional interest in Ethereum ETFs has climbed sharply since late April, as reflected in the rising ETH/BTC ETF holdings ratio reported by CryptoQuant. This shift indicates confidence that ETH could outperform BTC, possibly boosted by recent upgrades like Pectra or improving macroeconomic factors.

Ethereum’s price relative to Bitcoin has already recovered around 38% from its January 2020 lows, indicating that investors may be betting the bottom is behind them and a broader altcoin rally is on the horizon.

Market experts echo this sentiment. March Zheng of Bizantine Capital highlights that ETH has historically been a key indicator of risk appetite in the crypto space, with its gains often triggering widespread altcoin rallies.

On-chain data further supports optimism for Ethereum: ETH’s spot trading volume relative to BTC surged to 0.89 last week, its highest level since August 2024, reminiscent of the bullish period between 2019 and 2021 when Ethereum outperformed Bitcoin by several multiples.

In addition, ETH exchange deposits—a potential proxy for selling pressure—have dropped to their lowest relative levels since 2020, signaling that investors may be holding firm in expectation of higher prices.

Still, confirmation of the rally depends on ETH breaking above its 365-day moving average against BTC.

While undervaluation, growing institutional demand, and reduced selling pressure paint a bullish picture, CryptoQuant warns that Ethereum’s network usage remains a challenge. Without increased adoption and active network participation, a sustained price surge may be difficult to achieve.