Ethereum Shows Signs of Accumulation Amid Strengthening CVD and Elevated Correlation

Ethereum is currently maintaining its position above the $3,150 mark as the market transitions into a more bullish phase following a period of significant selling pressure. Analysts are divided on whether this recovery is merely a relief rally or the foundation for a more sustained increase. A report from CryptoQuant indicates that the Cumulative Volume Delta (CVD) is reflecting increased volatility, suggesting that trader behavior is shifting as the market seeks stability. However, sporadic buying activity highlights that a full bullish reversal has yet to be confirmed.

Key Takeaways

Ethereum is holding above $3,150, signaling a potential bullish phase after a period of heavy selling.
The Cumulative Volume Delta (CVD) shows increased volatility, suggesting shifting trader behavior.
Recent CVD spikes indicate sporadic buying, lacking strength for a definitive bullish trend.
The 30-day correlation between price and CVD remains steady, impacting Ethereum's price direction.
Ethereum is recovering cautiously but faces resistance levels that need to be overcome for sustained growth.

Analyzing CVD Volatility: Buyers and Sellers Clash

Recent insights from the Arab Chain report reveal that Ethereum's CVD has recently turned positive, aligning with price attempts to stabilize above the $3,100 level. This indicates new liquidity entering the market through short-term buy orders, suggesting that some traders are looking to accumulate during price dips.

However, the CVD's sudden spikes and quick pullbacks demonstrate an ongoing battle between buyers and sellers. This volatility indicates that Ethereum has not reached a state of stability or established a clear structural trend.

Binance Ethereum CVD Momentum & Price Correlation | Source: CryptoQuant

The report also mentions the significance of a 30-day correlation between CVD and ETH price, which remains steady at about 0.6 even with lower price levels. This suggests that liquidity flows continue to play a crucial role in influencing Ethereum's price consistently. While buying pressure seems irregular, its recurring effects indicate traders are actively responding to market dynamics.

Overall, this behavior shows that investors are trying to take advantage of volatility, especially as anticipation builds around potential liquidity inflows associated with upcoming network upgrades. Yet, as highlighted by the Arab Chain, Ethereum may struggle to achieve a significant upward movement without more consistent accumulation and reduced short-term selling pressure.

Ethereum's Recovery: Facing Key Resistance Levels

Currently, Ethereum's price is demonstrating a tentative recovery, rising above the $3,150 level. However, broader chart analysis reveals that the underlying market structure remains delicate. Following a sharp decline from October's highs near $4,500, ETH found support just above $2,700, where increased buying volume has been evident—illustrated by a recent surge of green candles at the chart's base. While this hints at renewed interest at lower price levels, it is not a definitive trend reversal.

ETH Testing Key Resistance | Source: ETHUSDT chart on TradingView

The price is approaching the 100-day Simple Moving Average (SMA), which has flipped from support to resistance. Successfully reclaiming this level would be a critical step in restoring bullish momentum. Beyond this point, the 50-day SMA represents another obstacle, continuing to trend downward, reflecting ongoing medium-term selling pressure.

Despite the recent rebound, trading volume remains inconsistent, revealing hesitancy among market participants. For ETH to challenge the next resistance zone around $3,300–$3,350, stronger follow-through buying will be necessary, as this region aligns with previous breakdown points.

Featured image from ChatGPT, chart data from TradingView.com