Ethereum’s recent rally is sparking renewed investor optimism for a fresh “alt season,” according to a new CryptoQuant report.
The report highlights that ETH has quietly entered a rarely seen valuation zone, based on the ETH/BTC Market Value to Realized Value (MVRV) ratio — a key metric comparing Ethereum’s market value against its realized value, relative to Bitcoin. This ratio has fallen to levels not witnessed since 2019, signaling that ETH is significantly undervalued compared to BTC.
Historically, such low MVRV readings have preceded strong rallies for ETH, often resulting in it outperforming Bitcoin by a wide margin.
Institutional investors appear to be taking note. Data from CryptoQuant reveals that demand for ETH-focused ETFs has surged, with the ETH/BTC ETF holdings ratio climbing steeply since late April. This shift suggests growing confidence that ETH could outperform BTC, possibly driven by the recent Pectra network upgrade or an improved macroeconomic landscape.
Supporting this bullish sentiment, the ETH/BTC price ratio has already bounced back 38% from its lowest point since January 2020, hinting that traders believe the bottom is in and a broader altcoin rally could be on the horizon.
Market voices echo this outlook. March Zheng, General Partner at Bizantine Capital, recently told CoinDesk that ETH often serves as the primary on-chain indicator for risk appetite in altcoins, with its significant moves typically leading wider altcoin gains.
On-chain metrics back this optimism further: ETH’s spot trading volume relative to BTC jumped to 0.89 last week — the highest since August 2024 — signaling renewed investor interest. Similar patterns were seen during 2019-2021 when ETH outpaced BTC by roughly four times.
CryptoQuant also points out that ETH exchange deposits, a proxy for potential selling pressure, have dropped to their lowest relative level since 2020. This decline suggests investors are holding onto ETH, anticipating price appreciation.
That said, confirmation of this bullish trend hinges on ETH breaking decisively above its key 365-day moving average against BTC.
While undervaluation, rising institutional interest, and waning selling pressure set a positive stage for ETH’s potential gains, network activity remains a concern. CryptoQuant’s earlier report warned that without increased usage of Ethereum’s network, sustaining a strong price rally will be challenging.
