Ethereum may have reached a decisive turning point compared to Bitcoin, according to a recent report from CryptoQuant. The ETH/BTC price ratio increased by 38% last week after hitting its lowest point since January 2020. Does this significant development signal the long-anticipated beginning of a new 'altcoin season'?
Technical Signal Confirms Reversal Potential
According to researchers from CryptoQuant, Ethereum is currently significantly undervalued compared to Bitcoin.
The MVRV (Market Value to Realized Value) indicator of ETH/BTC, comparing the current market value to the average acquisition value of these two cryptocurrencies, has reached unprecedented lows since 2019.
This detail is crucial because the last time this indicator reached such a level, Ethereum subsequently experienced a period of exceptional growth compared to Bitcoin.
Trading between ETH and BTC is significantly increasing. The volume ratio reached 0.89 last week, a record level since August 2024. Simply put, this means traders are increasingly positioning themselves on Ethereum rather than Bitcoin.
CryptoQuant experts see a striking similarity to the 2019-2021 period when the relative value of ETH quadrupled compared to BTC.
Specifically, during this period, the ETH/BTC price ratio increased from about 0.02 to over 0.08, reflecting Ethereum's significant outperformance compared to Bitcoin.
The price of Ethereum has been recovering for several weeks, a sign that investors are regaining confidence in its potential. At the time of writing this article, the trading price is $2,347, up 57% in a month.
Peter Brandt, a renowned technical analyst, recently changed his stance on Ethereum, shifting from a bearish outlook to a bullish forecast with a potential target of $4,000.
Organizational Interest and Sell Pressure Drive Optimism
Large institutional investors are returning to Ethereum. What is the evidence? Ethereum ETFs have recorded continuous growth in assets under management since late April.
This new interest is not coincidental: it coincides with announcements of major technical upgrades like EIP-7928, which promise to significantly improve network performance.
A particularly encouraging signal comes from CryptoQuant's data on ETH volatility: the amount of funds moving to exchanges is at its lowest since 2020. This metric is crucial for understanding market dynamics.
With less ETH on exchanges, it means holders are less likely to sell their tokens, thereby reducing downward pressure.
The ETF holding ratio and the ETH/BTC price ratio are rising simultaneously, a sign that institutional investors are rebalancing their portfolios in favor of Ethereum.
This trend is accompanied by significant technical developments such as the recent proposal for implementing parallel transactions on Layer 1, which could fundamentally transform the network architecture.
However, CryptoQuant analysts remain cautious. To firmly confirm this trend reversal, a major technical barrier must still be overcome: the ETH/BTC ratio must exceed the 365-day moving average.
Simply put, Ethereum must maintain superior performance compared to Bitcoin for a sufficiently long time to confirm this new bullish cycle. If this condition is met, we could witness sustainable growth for Ethereum in the coming months.
