Ethereum’s Potential Comeback Against Bitcoin: Insights from Cryptoquant

Ethereum’s recent price surge against Bitcoin suggests a potential market turnaround, according to Cryptoquant. The ETH/BTC ratio jumped 38% last week, hinting at reduced selling pressure and increased institutional demand. Furthermore, Ethereum is in an undervaluation zone compared to Bitcoin, drawing attention to possible Alt season onset. However, for any prolonged growth, continued technical validation is vital.

Ethereum appears to be at a significant turning point against Bitcoin, as indicated by a report from Cryptoquant. The price ratio of ETH to BTC jumped 38% last week after hitting a historic low not seen since January 2020. The on-chain data points to decreasing selling pressure and an uptick in institutional demand for ether, which could signal the dawn of an “Alt season.”

According to the findings from Cryptoquant, Ethereum’s relative valuation against Bitcoin has become extremely undervalued for the first time in four years, according to the ETH/BTC MVRV metric. This has happened before, specifically between 2017 and 2019, when ETH outperformed Bitcoin significantly. Such conditions historically serve as a precursor for ETH to make strides ahead, implying there’s potential for a rebound in valuation.

Last week, the trading volume of ETH relative to BTC surged to 0.89, marking the highest level since August 2024. This increase signals a greater interest among traders in Ethereum, reflecting a trend observed back in 2019–2021, when Ethereum surpassed Bitcoin’s growth by a factor of four. The timing aligns with ETH’s recent price recovery, indicating a renewed confidence in this cryptocurrency.

Institutional interest in Ethereum has been on the rise, with holdings in ETH ETFs escalating since late April. Cryptoquant analysts connect this to the expectation that ETH will outperform Bitcoin, fueled by upcoming scaling upgrades and several macroeconomic influences. The increase in both the ETH/BTC ETF holdings ratio and the price ratio signals important shifts in investment strategies.

Interestingly, exchange inflows for Ethereum have fallen to their lowest levels since 2020. This decrease, according to Cryptoquant’s analysis, suggests reduced selling pressure in comparison to Bitcoin. Historically, lower inflows could precede substantial rallies in ETH, as fewer tokens entering exchanges indicate a diminished appetite for liquidation.

Nevertheless, despite the positive trend, analysts at Cryptoquant urge caution. They highlight that for a sustained upward trend in the ETH/BTC ratio, it needs to break above its one-year moving average. Currently, the figures reflect levels seen in previous market bottoms, but thorough technical verification is vital for any long-term momentum, reiterating that the ETH/BTC ratio must cross the 365-day moving average for an assertive indication of bullish potential.