Ethereum has experienced a remarkable surge in price, rising over 20% within the past 24 hours, reaching an all-time high of $2,209. This significant jump is attributed to increased trading activity, particularly in the derivatives market, which saw its volume soar by 184%, as per Coinglass data. The rise is also accompanied by a surge in open interest for Ethereum (ETH) futures contracts, suggesting an influx of fresh capital into the market. This increase in open interest typically signals the beginning of a new trend as traders take long positions rather than just covering short positions. Additionally, more than $265 million in short positions were liquidated, further fueling the upward momentum. 2023 has seen Ethereum rise by 54% but is down by 26% year-to-date. However, there’s potential for a rebound if momentum continues to hold. This rally coincides with a decline in the ETH/BTC Market Value to Realized Value ratio, signaling that Ethereum has reached its most undervalued point relative to Bitcoin (BTC) since 2019. The MVRV (Market Value to Realized Value) ratio indicates whether an asset is overvalued or undervalued by comparing its market cap to its realized capitalization, the average price at which tokens have been traded. Currently, this ratio has fallen into a historically low range of 0.4-0.8, levels last seen in 2019. Historically, this has led to Ethereum outperforming Bitcoin. However, supply pressure, weak demand, and flat activity could stall a rebound. The current cycle features stagnant network activity, rising token supply, and underperforming ETFs, all factors that impact ETH’s potential price. Ethereum’s circulating supply recently hit an all-time high, reversing the previous deflationary trend. Lower mainnet fees and reduced ETH burns have altered its supply dynamics since EIP-1559. Active addresses remain flat, and decentralized finance (DeFi) activity has cooled off. Even institutional flows appear muted, with major Ethereum ETFs like Grayscale’s ETHE experiencing outflows. The current ETH/BTC MVRV ratio suggests a potential bottom, but whether this signals another altseason led by Ethereum is unclear. A fresh catalyst, such as the approval of staking in ETH ETFs or renewed DeFi interest, could sustain its momentum.