{"id":26207,"date":"2025-05-11T14:39:29","date_gmt":"2025-05-11T14:39:29","guid":{"rendered":"https:\/\/dogewisperer.com\/why-eths-undervaluation-may-not-signal-a-buying-opportunity-cq-report\/"},"modified":"2025-05-11T14:39:29","modified_gmt":"2025-05-11T14:39:29","slug":"why-eths-undervaluation-may-not-signal-a-buying-opportunity-cq-report","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=26207","title":{"rendered":"Why ETH\u2019s Undervaluation May Not Signal a Buying Opportunity: CQ Report"},"content":{"rendered":"
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Ethereum (ETH) plunged into territory not seen since 2019 before it posted a substantial recovery in the past few days. However, it\u2019s still trading at a steep discount to Bitcoin (BTC).<\/p>\n

According to the latest weekly report from on-chain analytics platform CryptoQuant, the ETH\/BTC MVRV ratio, which measures market value relative to realized value, has entered \u201cextremely undervalued\u201d territory, a level that in past cycles set the stage for major ETH rebounds.<\/p>\n

\u00a0A Discount Amid Growing Headwinds<\/h2>\n

CryptoQuant\u2019s analysis<\/a> noted that Ethereum\u2019s deep discounts against BTC have historically signaled prime buying opportunities.<\/p>\n

However, it pointed out that the current environment is markedly different, with a series of fundamental headwinds responsible for the undervaluation. These include the unraveling of Ethereum\u2019s once-promising deflationary supply narrative, with the asset\u2019s total supply hitting an all-time high of 120.7 million.<\/p>\n

The analytics platform attributed the reversal to March 2024\u2019s Dencun upgrade, which drastically reduced transaction fees and collapsed the ETH burn rate. With fewer tokens being burned, inflationary pressure found its way back into the ETH market.<\/p>\n

Further compounding the issue is that on-chain activity has been stagnant for a while. Since 2021, key metrics such as transaction counts and active addresses have dropped, mostly because Layer 2 (L2) networks diverted usage away from the Ethereum mainnet. Even though they have improved scalability, L2s have also diluted demand for base-layer block space, undermining ETH\u2019s utility narrative in the process.<\/p>\n

CryptoQuant also noted that institutional interest in the asset has been waning. The amount of staked ETH has reportedly dipped from its November 2024 peak of 35 million to about 34.4 million. ETF holdings have also shed as much as 400,000 ETH since February this year, reflecting weakening investor confidence.<\/p>\n

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\u201cBitcoin is benefiting from robust institutional demand, capped supply, and ETF-driven inflows,\u201d read the report, contrasting the fortunes of the two cryptocurrencies.<\/p>\n<\/blockquote>\n

Undervalued but Not Without Risk<\/h2>\n

Despite the obstacles, ETH staged a sharp rebound towards the end of the week. It shot up to roughly $2,400 on Friday.<\/p>\n

Additionally, over the past week, the altcoin soared just above 30%, crushing Bitcoin\u2019s 7.5% climb and vastly outpacing the global crypto market\u2019s 8% gain. The rally coincided with the successful activation<\/a> of the long-awaited Pectra upgrade on May 7, which introduced account abstraction and improved staking mechanics via 11 bundled EIPs. However, its impact may be muted.<\/p>\n

Past experiences show that Ethereum\u2019s discount to Bitcoin is often a buying signal. Still, CryptoQuant\u2019s analysis suggests that the returning inflation, weakening demand, and stagnant activity may mean that this could be the first cycle in which ETH\u2019s undervaluation isn\u2019t a springboard but a trap.<\/p>\n

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\u201cWhile ETH appears undervalued on a historical basis, its recovery path may be more complex and slower than in prior cycles,\u201d CQ concluded.<\/p>\n<\/blockquote>\n

The post Why ETH\u2019s Undervaluation May Not Signal a Buying Opportunity: CQ Report<\/a> appeared first on CryptoPotato<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Ethereum (ETH) plunged into territory not seen since 2019 before it posted a substantial recovery in the past few days. However, it\u2019s still trading at a steep discount to Bitcoin (BTC). According to the latest weekly report from on-chain analytics platform CryptoQuant, the ETH\/BTC MVRV ratio, which measures market value relative to realized value, has […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-26207","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/26207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26207"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/26207\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}