ETF Demand Grows for Undervalued Ether Amid Expectations of Incoming Rally: CryptoQuant

Ethereum is showing signs of a potential rally, sparking hopes for a new “alt season,” according to a recent CryptoQuant analysis.

The ETH/BTC Market Value to Realized Value (MVRV) ratio—a metric that compares Ethereum’s market valuation to its realized value relative to Bitcoin—has fallen to historically low levels unseen since 2019. This suggests that ETH is significantly undervalued compared to BTC.

Past occurrences of similarly low MVRV levels have often led to substantial gains for Ethereum, with ETH outperforming Bitcoin by a notable margin.

Investors are responding to this undervaluation, as reflected in the sharp rise in ETH ETF holdings versus BTC since late April, per CryptoQuant data. This growing interest from institutional buyers may be linked to Ethereum’s recent Pectra upgrade and a more supportive macroeconomic climate.

The ETH/BTC price ratio has recovered roughly 38% from its lowest point in early 2020, signaling that market participants might be betting on a reversal and the start of an altcoin upswing.

Market experts support this view. March Zheng, General Partner at Bizantine Capital, highlighted that ETH often acts as the leading indicator for risk appetite in the crypto space, with its rallies preceding broader altcoin booms.

On-chain data further reinforces the positive sentiment: Ethereum’s spot trading volume compared to Bitcoin surged to 0.89 last week, its highest level since August 2024—mirroring patterns from 2019 to 2021 when ETH significantly outpaced BTC.

Moreover, ETH deposits on exchanges—a proxy for selling pressure—have dropped to their lowest relative levels since 2020, implying holders are betting on higher future prices.

Still, confirmation of the trend hinges on Ethereum breaking decisively above its 365-day moving average against Bitcoin.

While the undervaluation, institutional demand, and low selling pressure point to promising upside, CryptoQuant warns that Ethereum’s network activity remains subdued. Without stronger usage growth, sustaining a long-term price surge could prove challenging.