Ethereum Lags Behind Bitcoin Amid Weak Demand
Key Takeaways
Ethereum (ETH) is currently as undervalued relative to Bitcoin (BTC) as it was back in 2019. At that time, ETH went on to significantly outperform BTC. However, the conditions today are different. Despite the favourable valuation, key catalysts are missing: weak demand, stagnant network activity, and structural hurdles may prevent history from repeating itself.
ETH/BTC MVRV Ratio at Historic Low
The MVRV ratio (Market Value to Realized Value) measures how much an asset is over- or undervalued. The current ETH/BTC MVRV ratio indicates an extreme undervaluation of Ethereum compared to Bitcoin — a level last seen in 2019. In previous cycles, such phases were followed by strong ETH rallies, driven by speculative inflows and capital rotation into altcoins.
Why This Cycle Is Different
Unlike in previous years, the current narrative is dominated by Bitcoin. Institutional investors and exchange-traded funds (ETFs) are focusing on BTC. These capital flows are structurally strengthening Bitcoin and making it harder for Ethereum to replicate its past momentum. The macroeconomic environment and regulatory developments currently favour BTC as “digital gold.”
Structural Weaknesses in Ethereum
An analysis of on-chain data reveals several challenges:
- Rising Total ETH Supply: The circulating supply has surpassed 120.7 million — an all-time high. Without sufficient burning or increasing demand, selling pressure could build.
- Declining Network Activity: Since 2021, the number of active addresses and transactions has stagnated. This suggests a lack of new user growth.
- Decreasing Institutional Interest: The amount of staked ETH is growing slowly, and funds are holding less ETH. Demand for ETH-based financial products is also declining.
These factors argue against short-term outperformance relative to Bitcoin.
Large ETH Withdrawals from Exchanges – A Glimmer of Hope?
Recently, over 85,000 ETH were withdrawn from Binance — one of the largest outflows in recent months. Such movements can indicate accumulation by large investors (whales). Less ETH on exchanges often means reduced selling pressure. If this trend continues, it could lead to a supply shortage — a potential price driver.
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However, not every withdrawal automatically leads to rising prices. Some investors may move their coins for security reasons. The coming days may reveal whether these are strategic buys or simply precautionary moves.
Our Assessment
Ethereum currently shows valuation patterns similar to those seen before previous rallies against Bitcoin. But this time, the tailwinds are missing: demand is weak, network activity is stagnant, and institutional support is waning. While large exchange outflows are a hopeful sign, they are not enough on their own to signal a trend reversal. Those betting on ETH outperformance should closely monitor fundamental developments and not rely solely on historical patterns. A new altcoin season is possible — but not guaranteed.
| Symbol | ETH |
| Coin type | Alt Coin |
| Transaction Speed | Medium |
| Pros |
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| Cons |
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| Further practical applications | |
| Price | 2342.97 |
| 24h % | 10.12 % |
| 7d % | 27.34 % |
| 30d % | 42.79 % |
| 60d % | 25.40 % |
| 1y % | -22.55 % |
| Market Cap | $283,240,777,590.00 |
| Official Links | Website | Source Code |
| Socials | Reddit | X |
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