Ethereum recently posted a remarkable 20% gain, reaching its most undervalued level relative to Bitcoin since 2019. This price surge was driven by a substantial rise in trading activity, particularly in the derivatives market, where volume soared by 184%, according to data from Coinglass.
Simultaneously, open interest in Ethereum futures climbed by 20% within 24 hours, indicating a fresh influx of capital and growing investor confidence.
This uptick in open interest, alongside the price rally, often signals the early stages of a bullish trend, as traders initiate new long positions rather than merely closing existing short ones. Reinforcing this upward momentum, more than $265 million in short positions were liquidated, adding further buying pressure and accelerating the rally.
The positive momentum also coincides with a continued decline in the ETH/BTC Market Value to Realized Value (MVRV) ratio. In a post shared on X on May 8, analysts at CryptoQuant emphasized that Ethereum has reached its most undervalued level compared to Bitcoin since 2019, based on this metric.
ETH is now extremely undervalued compared to BTC, the first time since 2019.
Historically, this led to Ethereum outperforming.
However, supply pressure, weak demand, and flat activity could stall a rebound. pic.twitter.com/QqU2Xh3vo9
— CryptoQuant.com (@cryptoquant_com) May 8, 2025
The MVRV ratio is a key valuation tool, comparing an asset’s current market capitalization to its realized capitalization—the average price at which tokens last changed hands. Presently, Ethereum’s MVRV ratio relative to Bitcoin has dropped into a
However, despite these seemingly bullish signals, CryptoQuant cautions that Ethereum may struggle to replicate its past performance despite positive signals. Key challenges include sluggish network activity, increasing token supply, and underwhelming results from Ethereum-based ETFs, which could restrict its upside potential in the near term.
Adding to these headwinds, Ethereum experienced a sharp decline earlier this year, falling below the $3,000 support level to around $2,500. This marked one of the steepest sell-offs in recent history. According to Coinglass, the drop was partly triggered by geopolitical developments, specifically U.S. President Trump’s imposing a 25% tariff on imports from Canada, Mexico, and China, contributing to broader market volatility and heightened investor uncertainty.
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