Ethereum may have reached a critical juncture against Bitcoin, according to a recent CryptoQuant report. The ETH/BTC price ratio surged 38% last week after hitting its lowest level since January 2020. Could this dramatic shift signal the long-awaited start of a new "altcoin season"?
Key Takeaways
- The ETH/BTC MVRV ratio indicates Ethereum is historically undervalued, similar to conditions preceding its 2019 bull run.
- ETH/BTC trading volume reached a 0.89 ratio, the highest in 9 months.
- ETH exchange deposits have plummeted to their lowest level since 2020.
Technical Signals Suggest a Potential Trend Reversal
CryptoQuant researchers highlight Ethereum's current undervaluation relative to Bitcoin. The ETH/BTC MVRV ratio (Market Value to Realized Value) has hit a floor unseen since 2019—a crucial indicator, as Ethereum previously entered a period of exceptional growth against Bitcoin after similar conditions.
ETH/BTC trading volume intensified significantly last week, with the ratio hitting 0.89, a record since August 2024. This suggests traders are increasingly favoring Ethereum over Bitcoin. Analysts draw parallels to 2019-2021, when ETH's relative value quadrupled against BTC.
👉 Discover how Ethereum's technical upgrades could boost its performance
Ethereum's price has rebounded steadily in recent weeks, currently trading at $2,347—a 57% monthly increase. Prominent analyst Peter Brandt revised his Ethereum outlook from bearish to bullish, projecting a potential $4,000 target.
Institutional Interest and Reduced Selling Pressure Fuel Optimism
Institutional investors are returning to Ethereum, evidenced by growing assets in Ethereum ETFs since late April. This resurgence aligns with major technical upgrades like EIP-7928, promising significant network improvements.
CryptoQuant data reveals ETH transfers to exchanges are at their lowest since 2020—a key metric indicating reduced sell pressure as holders retain their tokens. Simultaneously rising ETF holdings and ETH/BTC price ratios suggest institutional portfolios are rebalancing toward Ethereum.
Challenges Ahead
Despite promising signs, CryptoQuant analysts remain cautious. To confirm this trend reversal, ETH/BTC must surpass its 365-day moving average—a critical technical hurdle. Sustained outperformance against Bitcoin could validate a new bullish cycle for Ethereum.
👉 Learn how to navigate Ethereum's evolving market dynamics
FAQ
Q: What does the ETH/BTC ratio indicate?
A: It measures Ethereum's value relative to Bitcoin. A rising ratio suggests ETH is outperforming BTC.
Q: Why are reduced ETH exchange deposits significant?
A: Fewer deposits mean less selling pressure, potentially supporting price growth.
Q: What institutional factors support Ethereum?
A: Growing ETF assets and technical upgrades like EIP-7928 enhance institutional confidence.
Q: How does the current MVRV ratio compare to 2019?
A: Similar undervaluation preceded Ethereum's 2019 bull run, hinting at potential repeat performance.
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