ETH rallying, investors getting hyped for an ‘Alt season’
May 17, 2025, 7:25 a.m. The recent CryptoQuant report reveals that ETH’s rally is sparking excitement among investors, hinting at a potential ‘Alt season’ on the horizon. The report points out that ETH is currently undervalued compared to bitcoin (BTC), reaching a ratio not seen since 2019. This rare occurrence is signaled by Ethereum’s ETH/BTC Market Value to Realized Value (MVRV) metric, which measures market sentiment and historical trading patterns. Historically, when this indicator hits such low levels, ETH tends to soar, outperforming BTC by a significant margin.
Investors seem to be catching on to this trend, as demand for the ETH ETF has surged recently. The ETH/BTC ETF holdings ratio has been on the rise since late April, indicating that institutional investors are betting on ETH to outshine BTC. This optimism could be fueled by the recent Pectra upgrade or a more favorable macroeconomic environment. The ETH/BTC price ratio has already bounced back by 38% from its lowest point since January 2020, suggesting that investors are betting on an upcoming ‘alt season’. Market participants, like March Zheng from Bizantine Capital, believe that ETH’s performance often sets the tone for altcoin rallies, making it a key indicator for risk-on sentiment.
On-chain data further supports this positive outlook, with ETH spot trading volume relative to BTC hitting its highest level since August 2024. This resurgence in trading activity is reminiscent of the period between 2019 and 2021 when ETH outperformed BTC fourfold. Additionally, ETH exchange deposits, a gauge of selling pressure, have plummeted to their lowest level since 2020, indicating that investors are anticipating higher prices in the future. However, the confirmation of this bullish trend hinges on ETH decisively breaking above its key 365-day moving average against BTC.
Despite the promising signs of undervaluation, institutional interest, and reduced selling pressure, ETH still lags behind in network activity. Without a boost in Ethereum usage, it may struggle to reach its full price potential. CryptoQuant previously highlighted this concern in a report, emphasizing the importance of increased network activity for ETH’s price trajectory. As the market continues to evolve, it will be interesting to see how these factors play out and whether ETH can maintain its momentum in the months ahead.
So, what does all this mean for investors? Well, it seems like ETH is gearing up for a significant uptrend, with the potential for an ‘alt season’ looming on the horizon. Whether you’re a seasoned trader or just getting started in the crypto space, keeping an eye on ETH’s performance could offer valuable insights into market trends. As the landscape shifts and new developments unfold, staying informed and adaptable will be key to navigating the ever-changing world of cryptocurrency.
