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CryptoQuant: The ETH/BTC ratio indicates that ETH is "severely undervalued", but resistance still exists.
PANews reported on May 8 that according to CoinDesk, the ETH/BTC ratio has entered the "extremely undervalued" zone, which is usually a bullish signal from historical data, but in the current market environment, traders who bet on a sharp rebound in Ethereum may need to be cautious. On-chain data firm CryptoQuant noted that the ETH/BTC market value-to-realized value (MVRV) ratio has fallen to a multi-year low, even though the ratio has previously signaled that ETH will outperform BTC. However, the current activity on the Ethereum network is lackluster, with weak growth in metrics such as the number of transactions and active addresses. In addition, the increase in Ethereum's total supply is associated with a sharp reduction in burn fees, mainly due to the reduction in transaction fees due to the Dencun upgrade in March 2024. Since 2021, Ethereum network activity has stagnated, and on-chain activity at the base layer has not expanded significantly. At the same time, the growth of Layer 2 solutions has weakened the value accumulation narrative of ETH, and institutional demand is also cooling, with both the amount of ETH staked and the ETH balance in investment vehicles declining, highlighting the overall decline in institutional demand.