A recent report by CryptoQuant suggested that a significant shift may have been reached by Ethereum in its performance against Bitcoin, indicating a possible beginning of an “Alt season.” The ETH/BTC price ratio experienced a 38% surge last week after reaching its lowest point since January 2020, with on-chain indicators showing a decline in selling activity and a rise in institutional interest in Ether.
Ethereum Shows Signs of Reversal as Key Metrics Break Long-Term Bottom Against Bitcoin
Researchers at CryptoQuant have identified Ethereum’s (ETH) valuation relative to Bitcoin (BTC) as entering a zone of significant undervaluation for the first time since 2019, based on the ETH/BTC MVRV indicator. Similar patterns between 2017 and 2019 preceded periods when ETH significantly outperformed Bitcoin, suggesting a strong potential for mean reversion.
ETH’s spot trading volume relative to BTC surged to 0.89 last week, reaching its highest level since August 2024 and indicating heightened trader engagement. According to CryptoQuant, this trend reflects patterns seen between 2019 and 2021, during which ETH outperformed BTC by a factor of four. ETH’s recent price recovery has aligned with the increase, signaling a revival in market confidence.
The rise in ETH ETF holdings since late April indicates growing institutional interest. Analysts at CryptoQuant have attributed this trend to anticipated ETH outperformance, influenced by scalability improvements and broader macroeconomic developments. A simultaneous rise in both the ETH/BTC ETF holdings ratio and the price ratio signals deliberate adjustments in investment strategies.
According to data from CryptoQuant, ETH exchange inflows have declined to their lowest level since 2020, indicating diminished selling pressure compared to Bitcoin. Historically, ETH price surges have followed such reduced inflows, as fewer tokens move to exchanges for potential liquidation.
Despite the recent rally, CryptoQuant analysts caution that the ETH/BTC ratio must exceed its one-year moving average (MA) to confirm a sustained upward trajectory. Present figures resemble previous bottom formations, yet technical confirmation remains essential for maintaining long-term momentum, according to the report.
The ETH/ BTC price ratio still needs to cross above its 365-day moving average to confirm a new leg up against bitcoin.
