Ethereum (ETH) is currently trading at $1,770, reflecting a 3% decline over the past week and 1.6% in the last 24 hours, continuing a broader corrective trend since peaking at $4,107 in December 2024. On-chain data indicates a consistent drop in spot volume, interpreted by analyst Darkfost as potentially stabilizing during this downtrend, signaling reduced volatility from large sell orders. Simultaneously, long-term holders are increasing their ETH positions despite unrealized losses, growing their wallets by over 22% between March and May. This accumulation suggests conviction in Ethereum’s undervaluation, historically preceding price rallies.
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<div id=""><p class=""><span>Ethereum (ETH) appears to be in an extended phase of price stability, trading at $1,770 at the moment. The cryptocurrency has seen a decline of 3% over the last week and 1.6% in the past 24 hours, continuing its overall corrective trend following a peak of $4,107 in December 2024.</span></p><p class=""><span>Despite the limited price fluctuations, on-chain metrics indicate that some underlying changes could affect market dynamics in the near future.</span></p><p class=""><strong class="root-Tkn6WL2y"><span>Ethereum Experiences Drop in Spot Volume</span></strong></p><p class=""><span>According to CryptoQuant analyst Darkfost, Ethereum’s spot volume is consistently dwindling. His review highlights a bubble chart that demonstrates two dimensions: the size of each bubble shows the spot volume, while its color reflects the rate of volume change.</span></p><span class="container-S5VA5POt"><figure><div style="height:inherit;margin:0 auto;max-height:600px;max-width:1066.6666666666667px;aspect-ratio:1.7777777777777777" class="preview-gDIex6UB fixedHeight-gDIex6UB preview-S5VA5POt"><picture class="picture-gDIex6UB"><source src="https://s3.tradingview.com/news/image/newsbtc:6082fad7b094b-3d21c27fa87a58e142b40c8682425c52-resized.webp" type="images/webp"/><img style="background-color:#faf9f9" alt="Ethereum spot volume bubble map chart" src="https://s3.tradingview.com/news/image/newsbtc:6082fad7b094b-3d21c27fa87a58e142b40c8682425c52-resized.jpeg" role="presentation" loading="lazy" class="image-gDIex6UB image-S5VA5POt"/></picture></div></figure></span><p class=""><span>The data reveals that the bubbles have been gradually shrinking and becoming lighter in color, signifying that fewer transactions are taking place and that the decrease in volume is slowing down.</span></p><p class=""><span>Although dwindling spot volume is typically seen as a sign of decreasing investor engagement or weak momentum, Darkfost views it differently amidst the current market correction.</span></p><p class=""><span>He posits that decreasing spot volume during a downtrend may serve as a stabilizing factor, potentially lowering the chances of significant volatility spikes induced by large sell-offs.</span></p><p class=""><span>Reduced volume in a corrective phase might indicate that sellers are either exhausting their positions or opting to step back, fostering conditions conducive for price stabilization. This trend could alleviate downward pressure and might set the stage for a more balanced market in the near term.</span></p><p class=""><span>However, Darkfost took a cautious approach, mentioning that diminished volume does not inherently signal that the market has bottomed out; it might merely denote a brief pause in volatility prior to the next market move.</span></p><p class=""><strong class="root-Tkn6WL2y"><span>Long-Term Holders Expand Their Holdings Despite Unrealized Losses</span></strong></p><p class=""><span>In another update, CryptoQuant analyst Carmelo Alemán examined the behavior of Ethereum’s long-term holders, noting that many ETH investors are still buying, even while facing unrealized losses.</span></p><p class=""><span>Accumulation addresses, characterized as wallets that consistently receive ETH with minimal selling activity, are typically regarded as strong hands with extended investment timelines.</span></p><p class=""><span>Alemán indicates that March 10 marked a critical juncture when the average realized price of accumulation addresses dropped below ETH’s market price, pushing these wallets into negative territory.</span></p><p class=""><span>Nonetheless, data reveals that accumulating addresses have boosted their balances by over 22% from March to early May, growing from 15.5 million ETH to 19 million ETH.</span></p><p class=""><span>This trend denotes strong conviction and implies that long-term holders believe Ethereum is undervalued at present levels. Historically, such accumulation in downturns has often preceded upward price movements, as decreased market supply creates favorable conditions for a rally when demand resurfaces.</span></p><p class=""><span>Featured image created with DALL-E, Chart from TradingView</span></p></div>