ETH Has Quietly Slipped into Historically Rare Territory

The signal comes from Ethereum's ETH/BTC Market Value to Realized Value (MVRV) metric, a gauge of relative valuation that measures market sentiment and historical trading patterns.

This analysis highlights a specific market signal that could have implications for the price performance of ETH relative to BTC in the coming months.

Here's a breakdown:

* **Historical Perspective:** A CryptoQuant report highlights a "rare" occurrence: ETH’s market value to realized value (MVRV) compared to bitcoin (BTC) has reached lows not seen since 2019, indicating the token is deeply undervalued. This metric, a measure of relative valuation that considers market sentiment and historical trading patterns, has typically seen ETH deliver significant gains afterward.

* Varying Institutional Interest: While BTC usually takes the limelight, data from CryptoQuant reveals a sharp rise in demand for an ETH ETF, with the ETH/BTC ETF holdings ratio increasing steeply since late April. This shift in allocation suggests a stronger anticipation of ETH outperformance among institutional investors, which could be linked to the recent Pectra upgrade or broader macroeconomic trends.

* Price Action and Trader Sentiment: The ETH/BTC price ratio has already seen a 38% rebound from its weakest level since January 2020, indicating that investors and traders are betting on a bottom and possibly an "alt season." This aligns with observations from March Zheng, General Partner of Bizantine Capital, who notes that traders should recall that typically, ETH has been the main on-chain altcoin indicator for risk-on, and its sizable upticks usually lead to broader altcoin rallies.

* Trading Volume Signals:

On-chain data provides further support for this optimism. ETH spot trading volume relative to BTC surged to 0.89 last week, reaching its highest since August 2024, signaling renewed appetite from investors. A similar trend occurred between 2019 and 2021, when ETH went on to outperform BTC by fourfold.

* Exchange Deposits Are At Relative Lows:

CryptoQuant also notes that ETH exchange deposits, often an indicator of selling pressure, have dropped to their lowest relative level since 2020, implying that investors are anticipating higher prices ahead.

* Network Activity Remains Low: