Ether's Valuation Improves Relative to Bitcoin, But Market Bottom Not Yet Confirmed by All Indicators

Ether is becoming increasingly attractive from a valuation standpoint, particularly relative to Bitcoin, but onchain data suggests the market has yet to reach a definitive cycle bottom, according to CryptoQuant.

In its latest weekly report, the analytics company said Ether (ETH) is trading roughly 17% below its realized price, or the average onchain acquisition cost of all ETH in circulation, of about $2,300. Historically, ETH trading below its realized price has coincided with periods of market undervaluation and long-term bottoms.

Ether is also showing signs of improving relative to Bitcoin (BTC). CryptoQuant said that ETH’s market value-to-realized value (MVRV) ratio has retreated from extreme overvaluation, exchange inflows have declined, exchange-traded fund (ETF) holdings have begun to recover after months of weakness, and ETH/BTC spot trading volumes have fallen into a range historically associated with market bottoms.

Even so, only two of CryptoQuant’s five bottoming indicators have reached historical reversal levels. The remaining metrics are improving but have yet to reach the extremes that have marked previous cycle lows, suggesting Ethereum’s bottom may still be forming.

The report comes as Ether briefly climbed above $1,950 this week and Bitcoin topped $67,000, buoyed by optimism surrounding the US CLARITY Act. At the same time, some market analysts have pointed to the potential for capital to rotate out of richly valued AI stocks and back into crypto, a shift that could further support Ether if risk appetite broadens.

Ethereum supply tightens as exchange outflows and staking climb

Ethereum has shown several constructive onchain signals over the past month. During the week beginning June 29, withdrawal activity on Binance, the world’s largest crypto exchange by trading volume, climbed to its highest level in more than three years.

Analysts generally interpret sustained exchange outflows as a sign that investors are moving assets into self-custody or staking rather than keeping them on exchanges for potential sale, although such flows do not guarantee accumulation.

Meanwhile, a record 34% of Ethereum’s circulating supply is now staked, according to Staking Rewards. As Cointelegraph previously reported, higher staking participation reduces the amount of ETH readily available for trading, potentially easing short-term selling pressure if demand remains resilient.

Tom Lee’s Bitmine Immersion Technologies, the biggest corporate ETH holder, continues to accumulate Ether, boosting its holdings by 325,000 ETH over a one-month period, despite sitting on large unrealized losses. It has set a target to hold 5% of the second-biggest crypto.