Ethereum's price has settled into a period of little movement, trading around $1,770. The asset has seen a drop of roughly 3% over the past week and 1.6% in the past 24 hours. This follows a larger correction since reaching a cycle high of $4,107 late last year.
While price action remains subdued, on-chain data shows shifts that could influence market behavior.
According to analysis from CryptoQuant, Ethereum's spot trading volume is consistently decreasing. Data indicates that fewer trades are taking place and the pace of the volume decline is slowing. This trend has brought daily volume near historic lows, according to separate reporting.
Low spot volume during a price correction can act as a stabilizing force. Analysts suggest this condition may reduce the chance of sudden price swings caused by large sell orders. It could mean sellers are becoming less active, potentially allowing for price consolidation.
However, this decrease in activity does not confirm the market has reached a bottom. It may simply represent a temporary pause in volatility before the next directional move occurs.
Meanwhile, long-term holders of Ethereum continue to accumulate the asset. This accumulation happens even though many holders are experiencing unrealized losses on their positions.
Wallets identified as accumulation addresses, which consistently receive ETH without significant selling, have increased their balances considerably. These addresses added over 22% more ETH between March and early May, growing from 15.5 million ETH to 19 million ETH.
This accumulation behavior suggests confidence among long-term investors who may view current ethereum price levels as undervalued. Historically, such accumulation during market downturns has led to reduced supply, creating conditions favorable for price increases when demand returns.
The market remains in a state of consolidation below resistance in the $1,900 to $2,000 range. A move below support around the 50 Exponential Moving Average, near $1,765, could prompt further selling toward $1,600. The eventual breakup from this low-volume range will likely set the course for the next significant market movement.
More analysis on Cryptocurrencies is available from NewsBTC.