Ethereum whales have increased their positions by $950 million: is a bottom forming for ETH?
The price of Ethereum (ETH) has rebounded 22% from its June low, holding above a key trend line for institutional investors. This rally coincides with renewed inflows into spot ETH ETFs, which had recorded outflows for weeks.
Large holders continued to actively accumulate the cryptocurrency even during the decline, as confirmed by recent on-chain data. However, the rapid growth in the volume of borrowed funds raises doubts about the stability of this success. The market is divided: has a real bottom formed, or is this another false bounce within a global downtrend?
Ethereum Holds the Monthly VWAP Line Again
On June 14, 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: the April breakout above VWAP gave a 19% rise, and the May one gave 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 uptrend. Although a direct causal link is not obvious, the correlation repeats regularly, making fund statistics an important indicator for investors.
Inflows into ETFs: A Reversal After a Tough Streak
The sentiment reversal came just in time. On June 15, the day after holding above VWAP, net inflows into spot ETH ETFs totaled $22.5 million. This broke an extremely painful streak of declines: from May 11 to June 12, outflows were recorded almost daily, except for 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.
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. If the market confirms the bottom, 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 Buy ETH, Signs of Capitulation Subside
Large investors began accumulating coins even before the chart crossed the VWAP line. 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 bought coins worth a total of about $950 million. At the same time, on-chain metrics recorded a decline in seller activity. Mass panic stopped on June 7, when the coin found a local low. It was then that the net change in exchange positions went negative, signaling an outflow of coins from trading platforms.
This behavior indicates a transfer of cryptocurrency to cold wallets for long-term storage. This trend is supported by whales, who promptly buy up any available volumes. As a result, a shortage of sellers has formed in the market, which usually heralds an imminent trend change. Analysts at Swissblock noted in their Altcoin Vector report that Ethereum has been in a capitulation phase for a long time—a state of strong market pressure that often precedes a powerful reversal. The current reduction in exchange balances confirms that the acute phase of selling appears to be behind us.
Key Levels and Risks
Currently, Ethereum is trading around $1,771, holding above the monthly VWAP at $1,705. To confirm the 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 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. Now, we are seeing the opposite process—open interest is rising along with the price. This 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 is the low at $1,507. A daily close below this level will 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 bounce.
My view: whale accumulation of $950 million and renewed ETF inflows are powerful bullish signals. However, the rise in futures open interest creates a risk of a "short squeeze" or, conversely, a cascade of long liquidations. The market has not yet been cleansed of excess leverage, so confirmation of the bottom is only possible after a confident breakout of $1,851. Until then, any bounce should be viewed with caution.