Ethereum Flashes Extreme Undervaluation – CryptoQuant Eyes 38% ETH/BTC Rally Soon

Ethereum (ETH) could be set for a major comeback against Bitcoin (BTC), according to new data from on-chain analytics firm CryptoQuant.

Ethereum may have hit bottom vs Bitcoin.

The ETH/BTC ratio just surged 38% from a 5-year low. Demand is rising, selling pressure is falling, and ETFs are loading up.

This could signal the beginning of an Alt season. pic.twitter.com/dosAgvW6UE

— CryptoQuant.com (@cryptoquant_com) May 16, 2025

A combination of historical patterns, rising investor demand, and declining selling pressure suggests that ETH could be entering a fresh cycle of outperformance—what many in the crypto community refer to as the beginning of an “alt season.”

The ETH/BTC price ratio, a key indicator of Ethereum’s performance relative to Bitcoin, has surged 38% over the past week after recently hitting its lowest level since January 2020, CryptoQuant reports.

Historically, this level has marked a bottom for ETH and has preceded large altcoin rallies. In fact, according to CryptoQuant, Ethereum just entered an extreme undervaluation zone relative to Bitcoin based on the ETH/BTC MVRV metric—the first such instance since 2019.

Similar conditions in 2017, 2018, and 2019 were followed by powerful mean-reversion moves in ETH’s favor.

The recent recovery in ETH appears to be underpinned by a shift in market behavior. Traders and investors are increasing their ETH exposure at a rapid pace.

ETH-to-BTC Spot Trading Volume Ratio Spike

The ETH-to-BTC spot trading volume ratio has spiked to 0.89, its highest since August 2024. This metric echoes a similar trend observed between 2019 and 2021, when ETH outperformed Bitcoin by a factor of four.

Institutional flows are also pointing in Ethereum’s favor. CryptoQuant notes a sharp uptick in the ETF holdings ratio of ETH relative to BTC since late April.

This implies that fund managers are allocating more heavily to Ethereum, possibly in anticipation of favorable market dynamics such as recent scaling improvements or a more ETH-friendly macro outlook.

Inflow Data Reveals Bullish Indicator for ETH

According to CryptoQuant, exchange inflow data reveals another bullish indicator for ETH. The ETH/BTC exchange inflow ratio has dropped to its lowest level since 2020, suggesting that fewer ETH holders are sending coins to exchanges to sell. In contrast, Bitcoin appears to be facing comparatively higher selling pressure.

CryptoQuant’s data paints a picture of growing ETH demand amid reduced selling pressure and relative undervaluation. If historical patterns hold true, Ethereum may be on the verge of regaining its dominance over Bitcoin and potentially leading the broader altcoin market into a new phase of growth.