Ethereum ‘Extremely Undervalued Against BTC' – Supply Pressure May Delay Recovery

Business Mayor

08-05-2025

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Ethereum has finally broken through a key resistance level, trading above $1,900 after pushing past the long-standing $1,850 barrier. This move marks the beginning of a breakout many hoped for—but few expected to arrive so soon. After weeks of hesitation, bearish pressure, and uncertain momentum, ETH is showing renewed strength just as broader market sentiment begins to shift.
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Adding weight to the breakout, new insights from CryptoQuant reveal that Ethereum is now extremely undervalued compared to Bitcoin, the first time this has occurred since 2019. Historically, such levels of ETH/BTC undervaluation have preceded periods of strong Ethereum outperformance. While price action is leading the way, on-chain data is reinforcing the bullish case, signaling that ETH may be entering a favorable phase in its cycle.
This renewed upside comes amid low expectations and broad skepticism, making it all the more impactful. As ETH trades above $1,900, traders and investors are watching closely for follow-through and potential continuation toward $2,000 and beyond. If history is any guide, Ethereum's recent move may not just be a short-term spike—it could be the beginning of a larger trend reversal, especially as the ETH/BTC valuation gap begins to close.
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Ethereum Flirts With $2,000 As Undervaluation Sparks Bullish Hopes
Ethereum is now approaching the critical $2,000 mark, a level that, if reclaimed and held, would confirm a technical breakout and potentially usher in a broader bullish phase. After weeks of sluggish movement and bearish pressure, ETH is gaining momentum and showing signs of strength across both price action and on-chain metrics. A close above $2,000 would mark a major shift in sentiment, signaling renewed confidence among investors and traders alike.
However, risks remain. Ongoing tensions between the US and China continue to inject uncertainty into global markets, and the US Federal Reserve has shown no sign of pivoting. With interest rates expected to remain elevated and quantitative tightening (QT) still in effect, the macroeconomic backdrop remains a headwind. Should these geopolitical and monetary factors ease, Ethereum's breakout could gain sustained traction.
According to CryptoQuant, the Ethereum-to-Bitcoin MVRV (Market Value to Realized Value) ratio highlights that ETH is now extremely undervalued compared to BTC—the first time this has occurred since 2019. Historically, such conditions have led to strong periods of Ethereum outperformance.
Ethereum and Bitcoin MVRV Ratio and Price | Source: CryptoQuant on X
Still, the bullish setup faces some internal friction. Supply pressure, weak on-chain demand, and flat network activity could stall momentum if market sentiment doesn't improve further. While Ethereum's current push is encouraging, confirmation will only come with sustained movement above resistance and stronger fundamentals. Until then, ETH remains at a critical juncture, with the potential to lead the next leg of the crypto rally—or slip back into consolidation if external and internal pressures persist.
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