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Ethereum's ETH/BTC Ratio Surges 38% From Five-Year Low

Coin WorldFriday, May 16, 2025 2:37 pm ET

1min read

Ethereum (ETH) is poised for a significant rebound against Bitcoin (BTC), according to recent data from on-chain analytics firm CryptoQuant. The ETH/BTC ratio has surged by 38% from a five-year low, indicating a potential shift in market dynamics that could favor Ethereum.

Historical patterns suggest that when the ETH/BTC ratio reaches such low levels, it often marks a bottom for Ethereum. This has been followed by substantial rallies in the past. CryptoQuant's analysis shows that Ethereum has entered an extreme undervaluation zone relative to Bitcoin, as indicated by the ETH/BTC MVRV metric. Similar conditions in previous years, such as 2017, 2018, and 2019, were followed by powerful mean-reversion moves in Ethereum's favor.

The recent recovery in ETH appears to be driven by a shift in market behavior. Traders and investors are rapidly increasing their exposure to Ethereum. The ETH-to-BTC spot trading volume ratio has spiked to 0.89, its highest level since August 2024. This trend mirrors the period between 2019 and 2021, when Ethereum outperformed Bitcoin by a factor of four.

Institutional flows also support Ethereum's bullish outlook. CryptoQuant notes a sharp increase in the ETF holdings ratio of ETH relative to BTC since late April. This suggests that fund managers are allocating more resources to Ethereum, possibly in anticipation of favorable market conditions or recent scaling improvements.

Exchange inflow data further supports the bullish case for Ethereum. The ETH/BTC exchange inflow ratio has dropped to its lowest level since 2020, indicating that fewer ETH holders are sending coins to exchanges to sell. In contrast, Bitcoin appears to be facing higher selling pressure.

CryptoQuant's data suggests a growing demand for Ethereum 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. This could signal the beginning of an "alt season," where alternative cryptocurrencies experience significant gains relative to Bitcoin.

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