Ether-Bitcoin (ETH/BTC) ratio has reached an “extremely underrated” zone in a move that flashes a historic bullish signal-but dealers who are aiming for a sharp ether (ETH) may want to break.

According to data from the data company Cryptoquant On-Chain, the ratio ETH/BTC to realized value (MVRV) has dropped to perennial low levels to reach levels that have previously marked periods of ETH Outperformance Against BTC.

The exchange rate for the two tokens, conventionally called a relationship, peaked over 0.08 at the end of 2021. The ETH/BTC ratio was 0.019 at the time of the press, down more than 75% from record heights.

MVRV is a metric that compares a token’s current market sheath with its realized activation or the value of each coin based on the price it was last moved on Blockchain. This effectively reflects the average cost base for all coins in circulation.

But the setup may not be so straightforward this time. Network activity remains flat and central utility metration as a transaction count and active addresses have seen a little momentum since the last Bull Run, Cryptoquant said.

The increase in total supply of ether is directly linked to the sharp decrease in burnt fees, as shown in the above chart, showing combustion activity that falls to almost zero. The reason behind this shift is the Dencun upgrade, which was implemented in March 2024, which significantly reduces transaction fees across the network, the company says.

Ethereum’s network activity has been largely flat since 2021 without any sustained growth in use in the last three years. This stagnation is repeated across key metrics, such as transaction volume and active addresses, indicating that Ethereum’s base layers have not experienced a meaningful expansion in activity on the chain.

Meanwhile, the growth of LAG 2 solutions such as arbitration and base has come to the price of mainnet activity. This dynamic cannibalization reduces the base layers’ fees and weakens ETH’s value information.

Institutional demand is also cooled: “The investor’s demand for ETH as a dividend, and the institutional active is weakened, as shown in falling stacked ETH and lower balances that ETFs and other investment vehicles have,” Cryptoquant wrote.

“The total value that has been stacked has fallen from its high time, while fund stocks continue to trend downwards, indicating reduced confidence from crypto-native participants and traditional investors,” it added.

The amount of ETH stacks has fallen in particular of its high time of 35.02 million ETH in November 2024 to about 34.4 million ETH, suggesting that investors can redistribute capital or seek more cash positions in the midst of a less favorable market environment.

In addition, ETH balances in investment products have decreased by approx. 400,000 ETH since the beginning of February, highlighting a broader decline in institutional demand.

Meanwhile, Bitcoin has continued to rise despite a macroeconomic environment that touched nearly $ 100,000 earlier on Thursday, as the appeal as a safe port is active growing among investors.