Ethereum (ETH) has been trading at $1,770, showing a slight decline of 3% over the past week and 1.6% in the last 24 hours. This trend follows a broader corrective phase after reaching a peak of $4,107 in December 2024.
Despite the stagnant price movement, on-chain data indicates potential shifts that could impact the market in the near future.
### Ethereum Sees Decline in Spot Volume
Darkfost, a CryptoQuant analyst, has highlighted a consistent decrease in Ethereum’s spot volume. Using a bubble chart to visualize this data, the analysis shows that the size of each bubble represents spot volume, with color indicating the volume change rate.
The bubbles have been shrinking in size and becoming lighter in color, suggesting a decline in trading activity. While lower spot volume could signal reduced investor interest or weak momentum, Darkfost views it as a stabilizing factor during a market correction.
In a downtrend, declining spot volume could help mitigate sharp volatility spikes caused by large sell orders. This decrease in volume might indicate that sellers are either reducing their positions or waiting on the sidelines, potentially leading to price consolidation and a more balanced market structure in the short term.
However, Darkfost cautions that cooling volume does not necessarily signal the market’s bottom, but rather a temporary respite before the next market move.
### Long-Term Holders Increase Exposure Despite Losses
On the other hand, CryptoQuant analyst Carmelo Alemán has observed that Ethereum’s long-term holders are increasing their exposure to the asset, even as they sit on unrealized losses.
Accumulation addresses, which represent wallets consistently accumulating ETH without significant selling, are viewed as strong hands with a long investment horizon. Despite these addresses experiencing unrealized losses, data shows that they have increased their ETH holdings by over 22% between March and early May.
This behavior indicates a strong belief among long-term holders that Ethereum is undervalued at current prices. Historical data suggests that accumulation during market downturns often precedes upward price movements, as reduced supply creates favorable conditions for a price rally when demand picks up.
In conclusion, Ethereum’s price stagnation and underlying market dynamics suggest a potential shift in market sentiment and behavior. While on-chain data can provide valuable insights, it is essential to consider a combination of factors when analyzing the cryptocurrency market.