Ethereum’s Price Stagnation: On-Chain Data Reveals Underlying Shifts
ethereum (ETH) is currently trading at $1,770, showing signs of prolonged price stagnation. The cryptocurrency has experienced a 3% decrease over the past week and a 1.6% dip in the last 24 hours.This continues a corrective trend that began after ETH reached a cycle high of $4,107 in December 2024.
Spot Volume Decline: A Stabilizing Force?
Despite the limited price movement, on-chain data suggests potential shifts that could influence market behavior. One key indicator is the decline in Ethereum’s spot volume.
CryptoQuant analyst Darkfost has observed a consistent decrease in Ethereum’s spot volume. His analysis uses a bubble chart, where the size of each bubble represents spot volume and the color indicates the volume change rate.
The data indicates that the bubbles have become smaller and lighter, reflecting fewer trades and a slowing pace of volume decline.
Traditionally, declining spot volume is seen as a sign of reduced investor interest. Though, Darkfost offers a different perspective:
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.
Darkfost,CryptoQuant Analyst
he suggests that lower volume during a corrective phase could mean sellers are exhausting their positions,leading to price consolidation. This can ease downward pressure and potentially set the stage for a more balanced market.
However, Darkfost remains cautious, 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: Accumulating Despite Losses
In a separate analysis, CryptoQuant analyst Carmelo Alemán examined the behavior of Ethereum’s long-term holders. The findings reveal that many ETH investors are continuing to accumulate, even while facing unrealized losses.
Accumulation addresses, defined as wallets that consistently receive ETH without important selling, are considered strong hands with longer investment horizons.
Alemán notes that March 10 was a pivotal moment when the average realized price of accumulation addresses fell below ETH’s market price, pushing thes wallets into negative territory.
Despite this, 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 indicates 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.
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.
Carmelo Alemán, CryptoQuant Analyst
The increased accumulation reduces the available supply, creating favorable conditions for a rally when demand returns.
FAQ: Ethereum Market Trends
- Q: what is causing Ethereum’s price stagnation?
A: A broader corrective trend after reaching a cycle high in December 2024. - Q: What does declining spot volume indicate?
A: it can act as a stabilizing force during a downtrend, reducing volatility. - Q: What are accumulation addresses?
A: Wallets that consistently receive ETH without significant selling, indicating long-term holding. - Q: Why are long-term holders accumulating ETH despite losses?
A: They believe Ethereum is undervalued and anticipate future price increases.
