Ethereum (ETH)
$2,432
has slipped to a valuation level rarely seen in the market. According to a recent report by CryptoQuant, Ethereum’s Market Value to Realized Value (MVRV) ratio against Bitcoin 
$105,140 has plunged to low levels last observed in 2019. This indicator suggests that Ethereum is at one of its historically lowest values compared to Bitcoin, and in previous instances where this ratio dropped to such levels, Ethereum’s price significantly appreciated, surpassing Bitcoin.
Increased Interest from Institutional Investors
Investors appear to be attentive to this low valuation. CryptoQuant’s data indicates a remarkable surge in demand for Ethereum ETFs. Since late April, the ETH/BTC ETF asset ratio has shown a rapid ascent. This trend reflects the expectations of many institutional investors that Ethereum could soon outperform Bitcoin.
Underlying this expectation might be Ethereum’s recent Pectra update and generally improving macroeconomic conditions. The ETH/BTC price ratio has recovered by 38% from its lowest point since January 2020. These developments are fueling increased buying interest among market participants and strengthening the notion that the period known as “alt season” might be approaching.
Market Indicators and On-Chain Movements
Optimism regarding Ethereum’s performance is not confined to price ratios. On-chain data also shows that investor interest is on the rise. Last week, the ETH spot trading volume ratio against BTC reached 0.89, marking the highest level since August 2024. This situation is likened to the scenario from 2019-2021 when Ethereum gained four times more value than Bitcoin.
Conversely, according to CryptoQuant, the volume of ETH sent to exchanges has hit its lowest since 2020. Typically, increasing ETH transfers to exchanges indicate selling pressure, but the current decline suggests that investors anticipate higher prices in the near future.
March Zheng, Managing Partner at Byzantine Capital, noted, “ETH has been the main indicator for on-chain alternative tokens, and significant rises usually precede broader altcoin surges.”
At this stage, definitively surpassing the 365-day moving average against BTC could be a critical breakout point for the market. Sustained movement above this level is interpreted as Ethereum potentially ascending to higher levels.
Risks and Uncertainties
Despite all the positive data, some challenges persist for Ethereum. CryptoQuant emphasizes that without a noticeable increase in the number of users transacting on the Ethereum network, it may be challenging for the price to move upward sustainably. Lack of growth in network activity raises questions about the sustainability of price performance.
While the increased interest from institutional investors and low market valuation present a positive short-term outlook, a visible rise in the overall usage of the Ethereum ecosystem is necessary for consistent long-term value appreciation.
Ethereum finds itself at a rarely observed undervaluation level in its history. Investor interest is continuously increasing. The increase in institutional investor positions and the minimization of ETH transfers to exchanges are noteworthy. However, low economic activity within the network may limit price increases. Investors who consider Ethereum’s market dynamics need to pay attention not only to short-term indicators but also to fundamental activities and network growth.