Ethereum May Have Reached a Pivotal Turning Point Against Bitcoin

ETH/BTC price ratio surged 38% last week after hitting its lowest level since January 2020

Ethereum (ETH) may have reached a pivotal turning point against bitcoin (BTC), which could signal the potential start of an “Alt season,” according to a recent Cryptoquant report.

The ETH/ BTC price ratio surged 38% last week after hitting its lowest level since January 2020, and onchain data suggests that this move is being driven by reduced selling pressure and growing institutional demand for ether.

Breaking the Bottom: Ethereum’s Metrics Signal Long-Awaited Reversal Against Bitcoin

Cryptoquant researchers note that ethereum’s relative valuation against bitcoin has entered an extreme undervaluation zone for the first time since 2019, based on the ETH/ BTC MVRV metric. Similar conditions in 2017–2019 were later followed by periods where ETH outperformed bitcoin by wide margins, suggesting strong mean-reversion potential.

Notably, the report highlights that ETH’s spot trading volume relative to BTC spiked to 0.89 last week, reaching the highest level since August 2024 and signaling increased trader exposure to ether.

Cryptoquant researchers note that this aligns closely with 2019–2021 trends, during which ETH outpaced BTC by 4x in terms of trading volume. The surge in volume also coincides with the recent rebound in ETH prices, which could indicate renewed market confidence in ether.

Furthermore, institutional interest in ether seems to be heating up, with ETH ETF holdings showing an increase since late April, according to Cryptoquant analysis.

The researchers note that this development ties in with broader expectations of ether outperformance, which is being fueled by scaling upgrades and macroeconomic factors. The ETH/ BTC ETF holdings ratio and price ratio have risen concurrently, which indicates that institutions are making strategic shifts in their cryptocurrency portfolio allocations.

Exchange Outflows Hit 2020 Low

On the other hand, exchange inflows for ETH have plummeted to their lowest point since 2020, signaling a significant reduction in sell pressure on ether relative to bitcoin.

Cryptoquant researchers note that lower exchange inflows for ETH usually precede rallies in the ETH/ BTC price ratio. This occurs because fewer tokens are flowing into exchanges, reducing the potential for liquidation and promoting price stability.

However, despite the latest rally, Cryptoquant analysts caution that the ETH/ BTC ratio needs to break above its one-year moving average (MA) to confirm a prolonged upward trend.

The current levels of the ratio are closely watched as they mark the lowest since January 2020, and past instances of reaching such low extremes have signaled significant shifts in the market dynamic.

To conclude, the analysis indicates that the ETH/ BTC price ratio must break above its 365-day MA to confirm a new leg up against bitcoin.

This move would be driven by a combination of reduced selling pressure, evident in the minimal exchange inflows, and increasing institutional demand, signaled by the rising ETF holdings and broader economic trends that favor ether.