Ethereum whales have bought ETH worth $950 million: a signal for a reversal or a trap?
Large holders continued to actively accumulate the cryptocurrency even during the decline, as confirmed by fresh on-chain data. On the other hand, the rapid growth in the volume of borrowed funds raises doubts about the stability of this success. Therefore, experts are debating whether the market has formed a real bottom or if this is just another false rebound within a global downtrend.
Ethereum Holds the Monthly VWAP Line Again
In mid-June, specifically on the 14th, the Ethereum price rose above the monthly VWAP line. This volume-weighted average price serves as a dividing line for large players between the accumulation and distribution phases of assets.
Previous breakouts of this indicator led to similar results. For example, after the April breakout above VWAP, 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. Of course, it is difficult to establish a direct causal link here, as events may simply reflect general market optimism. Nevertheless, the correlation repeats regularly, prompting investors to closely monitor fund statistics.
Spot ETF Flows Turn Positive Again After a Tough Streak
The sentiment shift came at a very opportune time. Literally the day after the price stabilized 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 series of declines. Between May 11 and June 12, capital outflows were recorded almost daily, with only two trading sessions as exceptions. 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 streak of successful days. Consequently, 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, Capitulation Signs Fade
Large investors began accumulating coins even before the chart crossed the VWAP line. Whales systematically increased their positions, completely ignoring the local price decline. According to analysts at Santiment, since June 10, the balances of millionaire wallets have grown from 124.85 million ETH to 125.4 million ETH. Thus, in just one week, they purchased coins worth a total of approximately $950 million.
In parallel, on-chain metrics recorded a decline in seller activity. Mass market panic subsided around June 7, when the coin hit a local low. It was then that the net position change indicator 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. This trend is supported by large whales, who are quickly buying up any available volumes. As a result, a seller deficit has formed in the market, which typically heralds an imminent trend reversal.
Analysts at Swissblock noted in their latest 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 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 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. The total open interest in ETH futures has jumped from $8.86 billion to $9.96 billion, and at its peak exceeded $10.27 billion.
Typically, a reliable foundation for growth forms only after the complete liquidation of excessive leveraged positions. Currently, we are seeing 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 declare the end of capitulation.
If a decline begins, the first support level will be $1,624, with the critical point at the low of $1,507. A daily close below this mark would force the market to seek new lows. Only a confident breakout above the $1,851 barrier will help distinguish a true bottom from a temporary rebound.
Expert Opinion: The accumulation of $950 million in ETH by whales is a powerful bullish signal, but it should not be viewed in isolation. The rise in futures open interest creates a risk of position "squeezing." Until the market clears excess leverage, any rebound could be a trap for retail traders. The key moment will be a close above $1,851, which would confirm a trend change.