Ethereum Spot Volume Decreases as Long-Term Investors Keep Accumulating

Ethereum (ETH) appears to be in a phase of price stagnation, currently trading around $1,770. The cryptocurrency has seen a decline of 3% over the past week and a 1.6% drop in the last 24 hours, continuing a downward trend following its peak of $4,107 reached in December 2024.

While the price has remained relatively stable, on-chain analytics suggest that some underlying changes may soon impact market dynamics.

Ethereum Experiences Decrease in Spot Volume

Analyst Darkfost from CryptoQuant has noted a steady decrease in Ethereum’s spot trading volume. His findings include a bubble chart where the size of the bubbles illustrates spot volume, and their color reflects the rate of volume changes.

The data indicates that the bubbles are progressively shrinking and becoming less vibrant, suggesting a decline in trading activity and a deceleration in the decrease of volume.

Although shrinking spot volume is often interpreted as diminished investor interest or weak momentum, Darkfost provides a different perspective within the context of a market correction.

He posits that a reduction in spot volume during a downtrend may serve as a stabilizing element, potentially lowering the chances of extreme volatility spikes due to substantial sell orders.

Reduced trading volume in a corrective phase might indicate that sellers are either depleting their holdings or stepping back, which could create a framework for price stabilization. This situation may soften the downward pressure and possibly lead to a healthier market balance in the near future.

Nonetheless, Darkfost advised caution in his analysis, stating that declining volume does not automatically imply that the market has hit its lowest point. It might simply signify a temporary lull in volatility before potential fluctuations resume.

Long-Term Investors Continue to Accumulate Despite Losses

In a different report, analyst Carmelo Alemán from CryptoQuant examined the behavior of Ethereum’s long-term holders and found that many investors are still accumulating ETH, even while facing unrealized losses.

Addresses engaged in accumulation, defined as wallets that consistently receive ETH while showing minimal selling activity, are typically regarded as possessing strong conviction with a long-term investment outlook.

Alemán pointed out that March 10 was significant, as the average realized price for accumulation addresses fell below Ethereum’s market price, putting these wallets in a position of loss.

Despite this trend, data indicates that accumulation addresses have boosted their total holdings by over 22% between March and early May, climbing from 15.5 million ETH to 19 million ETH.

This pattern highlights strong investor belief and suggests that long-term holders view current prices as undervalued. Historically, such accumulation in downturns has led to subsequent price increases, as a tighter supply in the market can foster favorable conditions for upward momentum when demand returns.