Ether-Bitcoin Ratio Enters Bullish Zone Amid Low MVRV, But Stagnant Network Activity Raises Concerns

The Ether-Bitcoin (ETH/BTC) ratio has reached a historically undervalued zone, with the Market Value to Realized Value (MVRV) ratio at multi-year lows, suggesting potential Ethereum outperformance. However, stagnant network activity, declining institutional interest, and reduced core usage metrics on the Ethereum mainnet complicate this outlook. Despite the attractive historical valuation, Ethereum faces challenges such as flat transaction volume, reduced staking, and lower developer activity. The current low volatility in the ETH/BTC ratio could lead to significant market moves, but the direction remains uncertain.

ETH/BTC Ratio Falls to Multi-Year Lows

The ETH/BTC ratio, a key metric used to compare the relative strength of Ethereum to Bitcoin, currently stands at 0.019—down more than 75% from its peak above 0.08 in late 2021. This sharp decline places the ratio in what analysts describe as an “extremely undervalued” zone. Historically, such levels have preceded periods of ETH outperformance against BTC, making the current setup noteworthy for market observers.

Supporting this view is the ETH/BTC MVRV ratio, which has also dropped to multi-year lows. MVRV compares a token’s market capitalization to its realized capitalization—the aggregate value of all coins based on the price at which they last moved on-chain. A low MVRV ratio typically indicates that the asset is trading below the average cost basis of holders, suggesting undervaluation.

Network Activity Remains Flat Since 2021

Despite the historically bullish signal from the ETH/BTC ratio and MVRV, Ethereum’s on-chain fundamentals paint a less optimistic picture. According to CryptoQuant, Ethereum’s network activity has remained largely flat since 2021. Key metrics such as transaction volume and active addresses have shown no sustained growth over the past three years.

This stagnation is further reflected in the decline of base layer activity, as more users and developers migrate to Layer 2 solutions like Arbitrum and Base. While these scaling solutions offer lower fees and faster transactions, they also cannibalize activity from the Ethereum mainnet, reducing fee revenue and weakening ETH’s value accrual narrative.

The Dencun upgrade, implemented in March 2024, significantly reduced transaction fees across the network. While this has improved user experience, it has also led to a sharp decline in ETH burned through transaction fees—one of the key mechanisms introduced by EIP-1559 to reduce supply and support price appreciation. Burn activity has now fallen to near zero, further diminishing Ethereum’s deflationary appeal.

Institutional Demand and Staking Metrics Decline

Institutional interest in Ethereum also appears to be waning. CryptoQuant reports that the total amount of ETH staked has declined from its all-time high of 35.02 million ETH in November 2024 to approximately 34.4 million ETH as of early May 2025. This reduction suggests that investors may be reallocating capital or seeking more liquid positions amid a less favorable market environment.

Additionally, ETH balances held in investment products such as ETFs have dropped by around 400,000 ETH since February 2025. This trend indicates a broader decline in institutional demand, contrasting with Bitcoin’s continued rise and growing appeal as a safe-haven asset. Bitcoin recently touched nearly $100,000, buoyed by $3 billion in net inflows into U.S.-based spot ETFs over the past month.

Developer Activity Slows, But Ethereum Retains Lead

Developer activity, often used as a proxy for ecosystem health, has also slowed across the crypto sector. Open-source contributions, as measured by GitHub commits, have returned to levels not seen since 2018. Despite this overall decline, Ethereum continues to lead in terms of core developer engagement, accounting for approximately 40% of all new code deliveries.

The Ethereum ecosystem currently maintains around 200 active developers, with weekly commits ranging between 200 and 300. While this is significantly lower than the peak of 93.2K weekly commits in August 2023, Ethereum still outpaces competitors like Solana, which has seen a steady outflow of developers and now averages under 100 weekly commits.

However, the broader slowdown in developer activity may reflect a maturing ecosystem rather than a lack of innovation. Many projects are now launching forks of established applications, and the end of incentive programs like airdrops has reduced user engagement in newer protocols.

Volatility Compression Signals Potential for Sharp Moves

Adding to the complexity of the current market setup is the ETH/BTC ratio’s volatility profile. According to analysts, the ratio has reached its lowest volatility level in over two years. Historically, such periods of compression often precede sharp directional moves, as market participants await a catalyst to break the stalemate.

While technical indicators suggest that momentum may be building, Ethereum’s price remains below key resistance levels. Until ETH reclaims the $1,900–$2,000 range, the broader bearish trend remains intact. The current low-volatility environment could lead to a breakout or breakdown, but the direction remains uncertain.

Broader Market Context

The broader crypto market is experiencing mixed signals. Bitcoin continues to attract institutional capital and is trading above all major moving averages. The Fear & Greed Index currently reads 65/100, indicating a sentiment of “greed” that typically supports bullish rallies. Meanwhile, Ethereum’s inability to capitalize on this broader optimism raises questions about its near-term positioning.

Macroeconomic factors, including ongoing trade negotiations between the U.S. and China, are also contributing to market volatility. In this environment, Ethereum’s flat network activity and declining institutional interest stand in contrast to Bitcoin’s growing narrative as a digital store of value.

References

• Ether (ETH) Price Analysis: Ether-Bitcoin Ratio Hits Bullish Level, but Caution Ahead
• Ether-Bitcoin Ratio Signals ETH Is 'Extremely Undervalued,' but Headwinds Remain: CryptoQuant
• Bitcoin to $100K This Week ? What Experts Are Saying
• Crypto developer activity returns to 2018 levels, Ethereum retains a significant share of innovation
• Ethereum Enters Compression Zone – ETH/BTC Chart Shows Low Volatility May Not Last Long
• CryptoQuant: ETH/BTC ratio shows ETH is “severely undervalued”, but resistance remains