Ethereum whales have increased their positions by $950 million: a signal for a reversal or a trap?
Ethereum (ETH) made a sharp 22% rebound from its June low, climbing back above a key trendline closely watched by institutional investors. This surge coincided with renewed capital inflows into spot ETH ETFs, which had been recording steady outflows for several weeks prior.
Large holders, known as "whales," continued to actively accumulate the cryptocurrency even during the downturn. According to recent on-chain data, since June 10, the balances of millionaire wallets have increased from 124.85 million ETH to 125.4 million ETH. Over the week, they purchased coins worth approximately $950 million. However, the rapid growth in leveraged positions casts doubt on the stability of this success. Experts debate whether the market has formed a real bottom or if this is another false bounce within a global downtrend.
Ethereum Holds the Monthly VWAP Line Again
In mid-June, specifically on the 14th, Ethereum's price rose above the monthly VWAP line. This volume-weighted average price serves as a dividing line for major players between the accumulation and distribution phases of assets. Previous breaks of this indicator yielded similar results: after breaking above VWAP in April, the coin rose by 19%, while the May breakout brought a more modest 7% gain.
Notably, in both cases, capital inflows into spot ETFs resumed a few days after the breakout. This dynamic suggests that institutions begin actively buying at the first signs of an uptrend. Investors should closely monitor fund statistics — although a direct causal link is not obvious, the correlation repeats regularly.
Spot ETF Flows Turn Positive Again After a Tough Streak
The sentiment reversal came just in time. Literally the day after the price consolidated above the VWAP line, on June 15, net inflows into spot ETH ETFs amounted to $22.5 million. This positive result ended an extremely painful series of declines. From May 11 to June 12, capital outflows were recorded almost daily, with only two trading sessions seeing inflows. For comparison, the situation looked much better in early May: on May 1, funds attracted $101 million, and on May 5, another $98 million.
Currently, the total net assets under management are approaching $10.04 billion. The recovery in May also started with small amounts, which then grew into a streak of successful days. Therefore, if a market bottom is confirmed, we may see a repeat of this positive scenario. However, relying solely on ETFs would be a mistake, as key processes are now occurring directly within the network.
Whales Continue Buying, Signs of Capitulation Fade
Large investors began accumulating coins even before the chart crossed the VWAP line. Whales steadily increased their positions, completely ignoring the local price decline. Simultaneously, on-chain metrics recorded a decline in seller activity. Mass market panic subsided around June 7, when the coin found a local low. It was then that the net change in exchange positions turned negative, signaling an outflow of coins from trading platforms.
This investor behavior indicates a transfer of cryptocurrency to cold wallets for long-term storage. This trend is supported by large whales who quickly buy up any available volumes. As a result, a seller shortage has formed in the market, which typically heralds an imminent trend change.
Analysts at Swissblock noted in their recent Altcoin Vector report that Ethereum has been in a capitulation phase for a long time. This state of strong market pressure often precedes a powerful price reversal. The current reduction in exchange balances confirms that the acute selling phase appears to be truly behind us. Nevertheless, the overall picture is significantly marred by the situation in the derivatives market.
Key Ethereum Levels Emerge
Currently, Ethereum is trading around $1,771, holding above the monthly VWAP, which is at the $1,705 level. Since the beginning of June, the coin has gained about 22% from its low of $1,507, but this is still insufficient for a definitive reversal. To confirm an uptrend, buyers need to close a daily candle above the resistance at $1,851. This would allow the asset to return to its previous trading range.
The main danger now lies in excessively high leverage. Total open interest in ETH futures surged from $8.86 billion to $9.96 billion, peaking above $10.27 billion. Typically, a reliable foundation for growth forms only after the complete liquidation of excessive leveraged positions. Currently, we are witnessing the opposite process — open interest is rising along with the price. This situation indicates the dominance of margin traders rather than genuine demand in the spot market. Overloaded long positions could trigger a wave of forced liquidations at the slightest downward movement, so it is too early to talk about the end of capitulation.
If a decline begins, the first support level will be $1,624, with the critical point being the low at $1,507. A daily close below this mark would force the market to seek new lows. Only a confident break above the $1,851 barrier will help distinguish a true bottom from a temporary bounce.
Cryptalist Expert Opinion: The $950 million accumulation by whales is undoubtedly a bullish signal, but it does not negate the risks associated with the overheated derivatives market. As long as open interest continues to rise in sync with the price, any positive scenario remains threatened by a sudden liquidation wave. A true bottom will only be confirmed after the market "sheds excess fat" in the form of excessive leveraged positions.