Ethereum (CRYPTO: ETH) is showing early signs of forming a bottom against Bitcoin (CRYPTO: BTC), but CryptoQuant’s head of research, Julio Moreno, said the data does not yet confirm that ETH is ready to outperform.

Two Of Five Indicators Signal A Bottom

Speaking on the Milk Road Show on July 23, Moreno said Ethereum’s performance relative to Bitcoin can offer insight into the broader altcoin market because ETH remains the largest and most influential smart-contract platform.

ETH is trading around $1,940, roughly 17% below its realized price, or the average cost basis of ETH holders, placing it in an undervalued zone. It is also closer to the lower end of its historical valuation range.

"When you go lower and near the lower band, the risk-reward ratio is much greater," he said.

However, ETH’s discounted valuation alone is not enough to confirm that the bottom is in.

Moreno described Ethereum as "cheaper, not capitulated," with only two of five valuation and demand indicators currently signaling a bottom.

The five indicators include:

• Ethereum’s price relative to its realized price
• Its relative valuation against Bitcoin
• Exchange inflows
• ETF holdings and
• Spot trading volume.

Supporting the bottoming case is ETH’s realized price and ETH-to-BTC spot trading volume ratio, which has fallen to historically depressed levels.

“Speculative interest in ETH has been fully washed out,” he noted.

ETH/BTC Still Has Room To Fall

Other relative-value indicators remain neutral rather than bullish.

Moreno said Ethereum was extremely overvalued against Bitcoin during its rally through August 2025. That premium has since disappeared. However, ETH has not yet reached the deeply undervalued levels that historically preceded major periods of outperformance.

The same applies to exchange flows.

Selling pressure on Ethereum has declined substantially relative to Bitcoin, but the ratio has not yet fallen into the extreme zone that would signal ETH has conclusively bottomed.

That means Bitcoin could continue outperforming in the near term before Ethereum takes the lead.

"Bitcoin might lead in the short term, but there will come a time when Ethereum outperforms, and we haven’t quite gotten there yet," Moreno said.

Bitcoin Rally Could Reach $72,000

Moreno remains cautious about Bitcoin’s move above $66,000 based on a historical rebound pattern.

CryptoQuant’s on-chain data suggests the market is entering the late stages of the bear cycle as holders increasingly realize losses rather than profits.

However, Moreno said that the bottoming process could still take several months.

He identified the traders’ on-chain realized price, an average cost basis focused on short-term market participants, near $72,000 as a potential resistance level.

Bitcoin has repeatedly tested that indicator during previous bear-market rallies before resuming its broader decline.

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