Ethereum Eyes Rebound as ETH/BTC Ratio Surges 38%

ETH shows signs of extreme undervaluation, with rising demand and reduced selling pressure pointing to a potential rally.

Ethereum may be on the verge of a significant breakout against Bitcoin, as multiple on-chain indicators reveal a shift in market sentiment favoring the second-largest cryptocurrency. According to new data from CryptoQuant, historical patterns and current investor behavior suggest that Ethereum could be entering a fresh cycle of outperformance.

ETH/BTC Ratio Rebounds from Four-Year Low

The ETH/BTC price ratio—widely used to gauge Ethereum’s relative strength against Bitcoin—has jumped 38% over the past week. This sharp rebound follows a decline that brought the ratio to its lowest level since January 2020.

CryptoQuant analysts note that this level has historically marked a bottom for Ethereum, often preceding major rallies across the broader altcoin market. Supporting this view, the ETH/BTC MVRV (Market Value to Realized Value) ratio indicates that Ethereum has now entered an extreme undervaluation zone—a condition last observed in 2019.

Similar setups in 2017, 2018, and 2019 were followed by strong mean-reversion movements in Ethereum’s favor, fueling speculation that a comparable cycle may now be underway.

Market Behavior Signals Shift Toward ETH

Beyond price metrics, investor activity appears to be favoring Ethereum. One of the most telling indicators is the ETH-to-BTC spot trading volume ratio, which recently surged to 0.89, its highest level since August 2024. This spike suggests traders are increasingly allocating capital toward Ethereum, possibly anticipating stronger relative performance.

Historical precedent adds weight to this trend. Between 2019 and 2021, a similar rise in ETH/BTC trading volume ratio coincided with Ethereum outperforming Bitcoin by a factor of four.

Institutional Allocation Tilts Toward Ethereum

Ethereum’s recovery is also being supported by shifting institutional sentiment. According to CryptoQuant, the ETF holdings ratio of ETH relative to BTC has seen a sharp uptick since late April. This change implies that fund managers and large-scale investors are increasing their Ethereum exposure, potentially in anticipation of favorable developments such as network upgrades or a more ETH-supportive macroeconomic backdrop.

These dynamics echo earlier cycles where institutional interest in Ethereum helped catalyze major price movements and broader market momentum.

Exchange Inflow Data Underscores Bullish Sentiment

Another key factor bolstering Ethereum’s outlook is the trend in exchange inflow data. CryptoQuant reports that the ETH/BTC exchange inflow ratio has fallen to its lowest level since 2020, suggesting a reduction in ETH being transferred to centralized exchanges for sale.

This implies lower selling pressure on Ethereum, while Bitcoin appears to be experiencing comparatively higher levels of coins being moved to exchanges. This divergence supports the view that Ethereum is being held more confidently by investors and may be poised for continued strength.

A Broader Altcoin Rally on the Horizon?

With Ethereum showing signs of renewed momentum, some analysts are speculating about the potential onset of a broader altcoin season—a market phase where altcoins outperform Bitcoin.

Historically, periods when Ethereum begins to gain ground on Bitcoin have often coincided with broader rallies across the altcoin landscape. Given the current convergence of technical metrics, trading behavior, and institutional flows, Ethereum may be signaling the early stages of such a phase.

CryptoQuant’s data presents a compelling case: undervaluation, reduced exchange inflows, increased trading volume, and institutional support are all aligning in a manner reminiscent of past Ethereum-led market cycles.

Conclusion: Ethereum’s Comeback May Just Be Beginning

After months of lagging behind Bitcoin, Ethereum appears to be staging a strong comeback. The recent 38% rebound in the ETH/BTC ratio, alongside signs of undervaluation and growing investor interest, suggests the market is entering a new phase of Ethereum dominance.

If historical patterns repeat, Ethereum could not only outperform Bitcoin but also ignite a broader rally across the altcoin market. With traders, institutional investors, and on-chain metrics all pointing in the same direction, Ethereum’s path forward looks increasingly bullish.

While nothing is guaranteed, the signals for Ethereum’s resurgence are growing louder—and the market may be starting to listen.