Ethereum (ETH) is currently experiencing a significant market dynamic, suggesting that its undervaluation compared to Bitcoin (BTC) may soon lead to gains. A recent CryptoQuant report highlights that the ratio of ETH to BTC has not been this low since 2019, which may precede an upward trend for ETH.

Key Observations:

• ETH’s trading level against BTC resembles conditions in 2019, which preceded ETH’s substantial price increase.
• Institutional interest in ETH is growing, as many are accumulating the cryptocurrency, anticipating it will surpass BTC, partly due to the recent Pectra upgrade.
• On-chain metrics show a drop in selling pressure and an uptick in trading volume, indicating promising potential for growth.

The report cites that historically, similar low metrics for ETH have resulted in considerable price rises, outperforming Bitcoin significantly in past markets.

Investors are taking note of this trend, with a marked increase in demand for ETH ETFs. Since late April, the ETH/BTC ETF holdings ratio has escalated, as institutional investors believe ETH will soon outshine BTC, bolstered by favorable market conditions.

As of now, ETH’s price ratio to BTC has risen by 38% from its lowest since early 2020, uplifting investor sentiment that a new ‘alt season’ could be on the horizon.

With ETH trading volume relative to BTC at levels not seen since August 2024, confidence in ETH’s future performance may be growing stronger. However, for Ether’s price to skyrocket, greater network activity is essential, making continued investor engagement critical.