Ethereum (ETH) seems to have extended its period of price stagnation, trading at $1,770 at the time of writing. The asset has dropped by 3% over the past week and 1.6% in the past 24 hours, continuing its broader corrective trend after reaching a cycle high of $4,107 in December 2024.
Although price movement has been limited, on-chain data suggests that certain underlying shifts could influence market behavior in the near term.
Ethereum Sees Plunge In Spot Volume
CryptoQuant analyst Darkfost has reported that Ethereum’s spot volume is experiencing a consistent decline. His analysis focuses on a bubble chart that visualizes two dimensions: the size of each bubble represents spot volume, and its color indicates the volume change rate.
According to the data, the bubbles have become progressively smaller and lighter in color, indicating that fewer trades are being conducted and that the pace of decline in volume is slowing.
While declining spot volume may traditionally be viewed as a sign of reduced investor interest or weak momentum, Darkfost interprets it differently in the context of a market correction.
He suggests that a decline in spot volume during a downtrend can act as a stabilizing force, potentially reducing the likelihood of sharp volatility spikes caused by large sell orders.
Lower volume during a corrective phase could mean that sellers are exhausting their positions or stepping aside, creating conditions for price consolidation. This can ease the intensity of downward pressure and potentially pave the way for a more balanced market structure in the short term.
However, Darkfost was cautious in his interpretation, noting that cooling volume doesn’t necessarily mean the market has bottomed out. Instead, it could simply mark a temporary pause in volatility before the next move.
Long-Term Holders Increase Exposure Despite Unrealized Losses
Meanwhile, in a separate update, CryptoQuant analyst Carmelo Alemán explored Ethereum’s long-term holder behavior and revealed that many ETH investors continue to accumulate, even while sitting in unrealized losses.
Accumulation addresses, defined as wallets that consistently receive ETH without significant selling, are generally seen as strong hands with longer investment horizons.
According to Alemán, March 10 marked a pivotal moment when the average realized price of accumulation addresses fell below ETH’s market price, pushing these wallets into negative territory.
Despite this, the data shows that accumulating addresses have increased their balances by over 22% between March and early May, growing from 15.5 million ETH to 19 million ETH.
This behavior reflects strong conviction and suggests that long-term holders believe Ethereum is undervalued at current prices. Historically, such accumulation during downturns has preceded upward price movements, as reduced supply on the market creates favorable conditions for a rally when demand returns.
Featured image created with DALL-E, Chart from TradingView
