Ethereum vs. Bitcoin: Is ETH Approaching a Market Bottom?

Ethereum is going through a particularly challenging period against Bitcoin. After months of underperforming, several valuation indicators and on-chain metrics suggest that ETH is trading at historically low levels. However, analysts at CryptoQuant believe it is still too early to conclude that the market has reached a definitive bottom.

One of the most important metrics is Ethereum's realized price, which represents the average price at which the ETH currently in circulation last moved on-chain. Ether is trading near $1,900, approximately 17% below its realized price of around $2,300. Historically, periods when ETH traded below its realized price have often coincided with significant undervaluation and market-bottom zones.

The weakness is also evident when comparing Ethereum directly with Bitcoin. The relative ETH/BTC MVRV ratio, which evaluates the valuation of both assets based on their market capitalization and realized capitalization, has declined from around 0.95 in August 2025 to approximately 0.65. According to CryptoQuant, this indicates that Ethereum has become significantly cheaper relative to Bitcoin.

Is Ethereum Forming a Market Bottom?

Several indicators suggest that this may be the case. ETH inflows to exchanges have declined, while ETF-related holdings have started to recover after several months of weakness. At the same time, ETH/BTC spot trading volumes have fallen to levels that coincided with market bottoms during previous cycles.

Another important factor is the shrinking liquid supply. During the week beginning June 29, ETH withdrawals from Binance reached their highest level in more than three years. A sustained outflow of cryptocurrency from exchanges may indicate that investors are moving their assets into self-custody or staking, reducing the amount of ETH immediately available for sale.

Staking is also playing an increasingly important role. Approximately 34% of Ethereum's circulating supply is currently locked in staking. A larger share of coins being removed from the liquid market can help reduce selling pressure, particularly if demand continues to recover.

The Signals Do Not Yet Confirm a Trend Reversal

Despite these encouraging developments, CryptoQuant remains cautious. Of the five indicators the firm uses to identify historical Ethereum bottoms against Bitcoin, only two have so far reached levels consistent with a potential reversal. The remaining three have improved but have not yet reached the extreme levels observed during previous cycle lows.

This distinction is important. An asset can remain undervalued for an extended period without immediately entering a recovery phase. For a stronger bullish case to emerge, Ethereum would need to demonstrate sustained demand growth and renewed capital inflows.

CryptoQuant has also previously highlighted what it describes as Ethereum's "adoption paradox." Network activity has reached high levels thanks to DeFi, stablecoins, smart contracts, and Layer 2 solutions, while the price of ETH has remained under pressure. This illustrates that increased usage of Ethereum's infrastructure does not automatically translate into higher demand for its native token.

At present, the data presents a mixed picture. ETH appears increasingly undervalued relative to Bitcoin, selling pressure is showing signs of easing, and a portion of the circulating supply is leaving exchanges. Nevertheless, there is still insufficient confirmation to declare that a definitive market bottom has been established. Ethereum may be entering a stabilization phase, but future demand and capital flows will determine whether this marks the beginning of a sustained recovery or merely another pause within a broader downtrend.