Ethereum whales have bought ETH worth $950 million: is a bottom forming or is this a trap?
Ethereum (ETH) made an impressive 22% rebound from its June low, returning above a key trend line closely watched by institutional investors. This surge coincided with renewed inflows into spot ETH ETFs, which had been recording capital outflows for weeks.
The largest holders of the coin continued to aggressively accumulate the asset even amid the recent downturn. Fresh on-chain data confirms that whales systematically increased their positions, ignoring the local price drop. However, the rapid growth in the volume of borrowed funds casts doubt on the sustainability of this rally. The market is currently at a bifurcation point — either we are witnessing the formation of a real bottom, or this is another false rebound within a global downtrend.
Ethereum Tests Monthly VWAP Again
On June 14, the ETH price closed above the monthly VWAP (Volume-Weighted Average Price) line. This indicator traditionally serves as a dividing line for major players between phases of accumulation and distribution of the asset. Previous VWAP breakouts led to similar results: in April, after breaking above this line, the coin rose by 19%, and in May — by a more modest 7%.
Notably, in both cases, capital inflows into spot ETFs resumed a few days after the breakout. This dynamic indicates that institutions begin actively buying at the first signs of an upward trend. Of course, it is difficult to establish a direct causal link here — the events may simply reflect general optimism in the market. Nevertheless, the correlation repeats regularly, and investors should closely monitor fund statistics.
ETF Inflow Breaks Painful Streak
The sentiment reversal came at a very opportune time. Literally the day after the price closed above the VWAP line, on June 15, net inflows into spot ETH ETFs amounted to $22.5 million. This positive result broke an extremely painful streak of declines: from May 11 to June 12, capital outflows were recorded almost daily, except for just two trading sessions. 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 the $10.04 billion mark. The recovery in May also started with small amounts, which then grew into a series of successful days. Therefore, if a market bottom is confirmed, we could 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, Capitulation Signs Fade
Large investors began accumulating coins even before the chart crossed the VWAP line. Since June 10, the balances of millionaire wallets have increased from 124.85 million ETH to 125.4 million ETH. Thus, in just one week, they bought coins worth a total of about $950 million.
Concurrently, on-chain metrics recorded a decline in seller activity. Mass panic in the market subsided around June 7, when the coin found a local low. It was then that the net change in positions on exchanges 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. Large whales are quickly buying up any available volumes, creating a seller shortage in the market, which usually heralds an imminent trend change.
Analysts at Swissblock noted in their recent Altcoin Vector report that Ethereum had 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 phase of selling appears to be truly behind us. Nevertheless, the overall picture is significantly marred by the situation in the derivatives market.
Key Ethereum Levels
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 upward trend, 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. The total open interest in ETH futures has jumped 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 excess leveraged positions. Currently, we are observing the opposite process — open interest is rising along with the price. This situation indicates the dominance of margin traders rather than real 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, and the critical point will be the low of $1,507. A daily close below this mark would force the market to seek new lows. Only a confident breakout of the $1,851 barrier will help distinguish a true bottom from a temporary rebound.
Expert Opinion: The accumulation of $950 million by whales and the resumption of ETF inflows are undoubtedly bullish signals. However, the growing open interest amid rising prices creates an extremely vulnerable structure. The market could face a sharp correction if large holders decide to take profits. Until the volume of borrowed funds decreases, any rally will be speculative in nature.