The Ether-Bitcoin (ETH / BTC) ratio has reached an “extremely undervalued” area in a decision that flashes a historically bullish signal-but Paris traders on a clear ether recovery (ETH) may want to take a break.
According to data from the Cryptochent chain data company, the market value ratio and the value achieved (MVRV) of the ETH / BTC fell on several years to reach the levels that previously marked periods of outperformance and outperformance against the BTC.
The exchange rate of the two tokens, conventionally called report, reached a peak greater than 0.08 at the end of 2021. The ETH / BTC ratio was 0.019 at the time of the press, down more than 75% compared to the record summits.
MVRV is a metric that compares the current market capitalization of a token to its capitalization made, or the value of each room according to the price which was moved for the last time on the blockchain. This effectively reflects the basis of the average cost of all traffic parts.
But the configuration may not be as simple this time. The network activity remains flat and basic user metrics such as the number of transactions and active addresses have seen little momentum since the last bull race, said cryp October.
The increase in total ether food is directly linked to the sharp drop in burned costs, as shown in the graph above, showing that burning activity fell to zero. The reason for this change is the Dencun upgrade, implemented in March 2024, which considerably reduces transaction costs across the network, said the company.
The activity of the Ethereum network has remained largely stable since 2021, without sustained growth in use in the past three years. This stagnation is taken up through key measurements such as the volume of transactions and active addresses, indicating that the base layer of Ethereum has not experienced significant expansion in chain activity.
Meanwhile, the growth of layer 2 solutions such as the arbitrum and the base is at the expense of the maintenance activity. This cannibalization dynamic reduces the basic layer costs and weakens the story of the ETH value.
Institutional demand is also a cooling: “Investors’ demand for ETH as a return and an institutional asset is weakening, as evidenced by the drop in ETH and the lower sales owned by ETFs and other investment vehicles,” wrote Crypto.
“The marked total value fell from its top of all time, while fundraising funds continue to decrease, which indicates a reduced confidence of crypto-native participants and traditional investors,” he added.
The amount of the ETH fell in particular its summit of 35.02 million ETH in November 2024 to around 34.4 million ETH, which suggests that investors can reassign capital or search for more liquid positions in the midst of a less favorable market environment.
In addition, ETH sales in investment products have dropped by around 400,000 ETH since early February, highlighting a broader drop in institutional demand.
Meanwhile, Bitcoin continued to increase despite a macroeconomic environment, receiving nearly $ 100,000 earlier Thursday while its attraction as a security asset increases among investors.
