Ethereum whales have increased their positions by $950 million: is a bottom forming for ether?
The price of Ethereum (ETH) has bounced 22% from its June low, returning above a key trend line for institutional investors. This momentum coincides with renewed inflows into spot ETH ETFs, which had been recording capital outflows for weeks. However, despite the positive dynamics, the market remains divided: some analysts see this as the formation of a true bottom, while others view it as just another false bounce within a global downtrend.
Ethereum Tests the VWAP Line Again
On June 14, the Ethereum price broke above the monthly VWAP line — the volume-weighted average price that serves as a dividing line between accumulation and distribution phases for major players. Previous breaks of this indicator led to similar results: after breaking above VWAP in April, the coin rose 19%, and 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 start buying actively at the first signs of an uptrend. Of course, it's difficult to establish a direct causal link here, but the correlation repeats regularly, and investors should closely monitor fund statistics.
ETF Inflows: A Reversal After a Tough Streak
The shift in sentiment came just in time. Literally the day after the price settled above the VWAP line, on June 15, net inflows into spot ETH ETFs reached $22.5 million. This positive result broke a very painful streak of declines: from May 11 to 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 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 happening directly within the network.
Whales Continue Buying: Signs of Capitulation Subside
Large investors began accumulating coins even before the chart crossed the VWAP line. Whales steadily increased their positions, completely ignoring the local price drop. According to Santiment analysts, the balances of millionaire wallets grew from 124.85 million ETH to 125.4 million ETH since June 10. Thus, in just one week, they bought coins worth a total of about $950 million.
At the same time, 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 change in exchange positions went 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, which usually heralds an imminent trend change.
Analysts at Swissblock noted in their latest 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 Levels and Risks
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 not enough for a final 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 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 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 real demand in the spot market. Overloaded longs could trigger a wave of forced liquidations at the slightest downward move, 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 level will 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.
My view: Whale accumulation and renewed ETF inflows are undoubtedly bullish signals. But as long as the market is overheated with leverage, any positive scenario remains at risk. A true bottom forms not on optimism, but on the complete liquidation of weak hands. Until open interest declines, I would refrain from aggressive buying.