A new CryptoQuant report says ETH has quietly entered a rare territory in history as a market signal shows that it is undervalued compared to Bitcoin (BTC) and has not been seen since 2019.

This signal comes from Ethereum's ETH/BTC market value to realized value (MVRV) metrics, a series of relative valuations that measure market sentiment and historical trading patterns.

Historically, ETH then brought significant gains and was significantly better than BTC whenever the indicator reached a similar low level.

Investors seem to be paying attention. According to CryptoQuant, demand for ETH ETFs has increased dramatically, with ETH/BTC ETF holdings rising sharply since late April.

This shift in allocation suggests that institutional investors expect ETH to outperform BTC, which could be driven by the recent Pectra upgrade or a more favorable macroeconomic environment.

Since January 2020, the ETH/BTC price ratio has rebounded 38% from its weakest level, suggesting investors and traders are betting on the bottom and there may be a "ALT season" soon.

This responds to what some market participants told Coindesk.

Bizantine Capital's general partner, March Zheng, said in a recent news that traders should remember that ETH is often the main on-chain altcoin indicator for risk driving, and its considerable rise will often lead to wider Altcoin rally.

On-chain data further supports this optimism. ETH spot trading volume relative to BTC soared to 0.89 last week, the highest since August 2024, indicating investors' appetite. A similar trend occurred between 2019 and 2021 when ETH continued to outperform BTC at a rate of four times.

CryptoQuant also noted that ETH Exchange deposits are often an indicator of sales pressure, which has dropped to its lowest level since 2020, meaning investors expect higher prices in the future.

For now, confirmation depends on ETH's decisive breaking its critical 365-day moving average for BTC.

Nevertheless, with compelling undervalues, growing institutional interests and decreasing sales pressures, ETH appears to have made a lot of room for upside in the coming months.

However, one thing that ETH is still lagging behind is network activity, just like the ones marked in previous reports. Without more people using Ethereum, it would be difficult to increase the price of tokens and head to the moon.