CryptoQuant's analysis indicates that Ethereum (ETH) has entered a zone of extreme undervaluation against Bitcoin (BTC), a condition not seen since 2019. This could set the stage for a repeat of past market behavior, where undervalued ETH often led to strong outperformance in the following months.
The ETH/BTC MVRV (Market Value to Realized Value) ratio has dropped below the historical threshold, previously signaling periods of significant undervaluation for Ethereum.
The chart highlights multiple past instances—marked with red circles—where the ratio dipped into the green undervaluation zone. On each occasion, this signaled key turning points. After touching the undervalued levels, Ethereum began outperforming Bitcoin for several months.
Currently, the ETH/BTC exchange rate is around 0.04, and the MVRV ratio has fallen to levels lower than its 365-day simple moving average.
CryptoQuant points out that historically, these levels provided excellent asymmetric opportunities for those seeking to capitalize on ETH's undervaluation. However, the analysis also carries a note of caution.
Despite the strong signal of undervaluation, the report warns that persistent "supply pressure, weak demand, and flat activity" could hinder or delay a swift price recovery in the coming months.
Without a surge in network usage or capital inflows, Ethereum could remain suppressed in the undervalued zone, even at attractive valuations. This could open up opportunities for those with a long-term bullish outlook on Ethereum.
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