Ethereum (ETH) May Be Entering an Accumulation and Compression Phase Similar to Bitcoin (BTC) in 2020

Over the past few months, the asset has remained within a descending parallel channel—a bearish formation defined by lower highs and lower lows.

Ethereum (ETH) is currently trading around $1,826. Over the past few months, the asset has remained within a descending parallel channel—a bearish formation defined by lower highs and lower lows. Since early January 2025, Ethereum has followed this trend without a decisive breakout.

However, there are signs that the downward move may be exhausting, setting the stage for a potential shift back toward higher prices.

Some analysts believe this pattern closely mirrors Bitcoin’s price behavior in 2020, when BTC consolidated around $8,000 before beginning a major rally to $64,000. According to them, Ethereum could now be entering a similar phase of accumulation and compression.

Technical Indicators Suggest ETH Reversal May Be Building

Ethereum’s Relative Strength Index (RSI) stands at 56.79—above the neutral 50 level—which points to growing buying momentum. The indicator also shows a bullish divergence from previous lows, a signal that downward pressure is weakening.

ETH has also managed to climb above the 20-day exponential moving average (EMA) at $1,754 and is now hovering around the 50-day EMA, currently near $1,858. These levels serve as short-term indicators of sentiment. Holding above them supports a shift in momentum toward the upside.

However, Ethereum still faces resistance at the 100-day and 200-day EMAs, located at $2,143 and $2,462, respectively. These longer-term moving averages are often used to confirm broader trend reversals. A sustained breakout above these levels, especially with strong trading volume, would add weight to the bullish thesis.

The upper boundary of the descending channel sits near the $1,950 to $2,000 range. This zone remains the most immediate resistance level. If ETH can breach it, the next major targets are $2,400 and $2,800—both of which served as support during the earlier phases of the downtrend.

On the downside, key support is holding at $1,550, a level that helped prevent further declines in March and April. A break below this level could open the door to further losses, possibly down to $1,400.

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On-Chain Activity Supports Long-Term Holding Behavior

Several key on-chain indicators suggest Ethereum is being accumulated rather than sold. Data from platforms like CryptoQuant shows a consistent drop in ETH held on exchanges. When investors move coins off trading platforms and into private wallets, it usually indicates long-term holding intentions and reduced sell pressure.

At the same time, staking activity on the Ethereum network continues to rise. More ETH is being locked into Ethereum 2.0, further lowering the available supply for trading. Dormant coins—those untouched for long periods—also remain unmoved, which often suggests confidence among long-term holders.

These on-chain signals mirror what was seen in Bitcoin’s run-up in late 2020, where declining exchange balances and rising wallet activity signaled accumulation before a major breakout. As Bitcoin went on to rally from around $7,000 to $64,000 within a year, similar trends in Ethereum could herald a substantial price move.