Ethereum Volume Drops as Bullish Signal Points ETH Price Rise to $2.6K

Key Insights:

• Ethereum spot volume is declining, which may reduce volatility during the ongoing ETH price correction.
• Stochastic RSI shows ETH in an oversold zone, hinting at a potential short-term bullish reversal.
• The upcoming Pectra upgrade aims to improve network usability but has yet to influence ETH price momentum.

Ethereum price has dropped over 40% since the beginning of the year, and it is holding near $1,769.

Though this protracted decline is worrying investors, recent technical signals and forthcoming protocol advancements imply that a past trend could be reformed. Some market analysts argue there is a pattern of decreasing spot trading volume on chain, which could be a stabilizing factor in the current downtrend.

Decline in Ethereum Spot Volume and Market Volatility

Ethereum’s spot volume has been gradually declining during the current correction. Darkfost, a market analyst, posted on X an analysis of Ethereum’s volume behavior, highlighting the relationship between volume size and rate of change.

Spot volume, represented as bubbles on a visual chart, has shown a consistent reduction in both size and intensity. Larger bubbles, representing higher volume, have become scarcer in recent weeks.

The color gradient in the chart reflects how fast trading volume changes over time. A cooling volume in a downward market scenario, as explained by Darkfost, may help reduce short-term volatility. Lower volume during corrections can indicate the exhaustion of aggressive sellers, potentially slowing further price drops.

This trend is not necessarily a confirmation of a bottom, but it could ease the pressure that has weighed heavily on the asset.

Ethereum has been particularly sensitive to macroeconomic factors recently, and reduced volume may signal that fewer market participants are selling at the current levels. At press time, Ethereum is valued at $1,771.84, showcasing a 2.12% drop over the past 24 hours.

Bullish Technical Indicators and Market Sentiment

Technical analysis presents contrasting signals to the ongoing price drop. BitBull, a technical analyst tracking Ethereum’s price movements, shared that the Stochastic RSI has entered oversold territory.

According to the analyst, this indicator is now at a level lower than during the FTX crash in late 2022. The convergence of Stochastic RSI lines indicates a potential upward crossover, which is traditionally interpreted as a bullish indicator.

BitBull suggested that this setup has not occurred since the fourth quarter of 2024. It could be pointing toward a short-term rebound.

A target price of $2,600 for Ethereum during May was mentioned based on historical behavior during similar technical formations. Although this does not guarantee a reversal, traders are closely monitoring whether the oversold signal will translate into a recovery.

Crypto Rover also weighed in on the situation, posting that an “Ethereum bullish crossover” may soon materialize. According to Rover, current market conditions are creating opportunities for buyers who believe in a medium-term uptrend. The general view across analyst commentary is that technical patterns are showing early signs of a shift. Even if market sentiment remains cautious.

Pectra Upgrade and Market Reaction

The Ethereum network is scheduled to undergo the Pectra upgrade on May 7. This update is expected to introduce new features aimed at improving user experience, enhancing staking efficiency, and lowering transaction costs. The upgrade will also enable the use of smart wallets and introduce compatibility with biometric authentication such as Face ID.

Despite its scope, there has been limited market excitement surrounding the upgrade. Ethereum has not shown upward price movement in anticipation of Pectra, which stands in contrast to previous upgrade cycles. Edein Chin, co-founder of Parataxix Capital, stated that although Pectra would improve network functionality, it is unlikely to be a major driver of price by itself.

Analyst Michael van de Poppe also noted a potential role in Ethereum’s price decline macroeconomic developments. A key factor driving present market sentiment is a study pointing to the Federal Open Market Committee (FOMC) meeting believed to coincide with the Pectra upgrade, according to him. And as the meeting nears, gold does the best of the assets, pulling liquidity away from the cryptocurrency market.

However, as evident from lower trading volume, oversold technical indicators, combined with the Pectra upgrade on the horizon, Ethereum is at a defining moment. With macroeconomic events, as well as the market structure still bringing uncertainty, many traders and analysts are looking at some sort of a recovery if key resistance levels around $1,800 are broken through.

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