Is the alt season coming? What does the surge in the ETH/BTC ratio suggest?

## Is the alt season coming after a bottom out for the first time in 5 years?

According to the analysis by the on-chain cryptocurrency analysis platform Cryptoquant on the 16th, the price ratio of Ethereum (ETH) to Bitcoin (BTC) has surged by 38% within a week from the lowest level in the past five years, indicating a higher likelihood that Ethereum has bottomed out in the cryptocurrency market. This movement is a rebound from the lowest level since January 2020, and historically, such bottoming out of the ETH/BTC ratio is often seen as a precursor to an alt season (a rising market for altcoins in general). (Below is the content of Cryptoquant's analysis report)

Source: Cryptoquant

Ethereum has recently entered the "extreme undervaluation zone" against Bitcoin based on the ETH/BTC MVRV indicator for the first time since 2019. Following similar situations observed in 2017, 2018, and 2019, periods where Ethereum significantly outperformed Bitcoin have followed, indicating a strong potential for mean reversion.

Source: Cryptoquant

Also, looking at the demand indicators, the relative ratio of Ethereum's spot trading volume to Bitcoin has surged since last week, reaching 0.89, the highest level since August 2024. This suggests that investors are increasing their exposure to Ethereum compared to Bitcoin, a similar phenomenon was observed during the period from 2019 to 2021 when Ethereum outperformed Bitcoin by four times.

Investing in Ethereum through exchange-traded funds (ETFs) is also gaining momentum. ETF holdings have risen sharply since late April, indicating a surge in ETF purchases of Ethereum. This upward trend may reflect Ethereum's outperformance expectations due to factors such as the recent Pectra upgrade and a favorable macro environment.

Furthermore, according to exchange inflow data, as of May 2025, the exchange inflow ratio of Ethereum has fallen to its lowest level since 2020. This indicates that Ethereum is currently experiencing significantly reduced selling pressure compared to Bitcoin, and is seen as a relatively optimistic signal for Ethereum. The combination of increased demand and decreased selling pressure is heightening the possibility of Ethereum's relative bottoming out and the arrival of alt season.

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