Ethereum whales have increased their positions by $950 million: is a bottom forming for ether?
The price of Ethereum (ETH) has rebounded 22% from its June low, holding above a key trend line for institutional investors. This rally coincided with renewed inflows into spot ETH ETFs, which had been recording outflows for weeks. The market situation is becoming increasingly interesting.
Large holders, or "whales," continued to actively accumulate the cryptocurrency even during the decline phase, as confirmed by fresh on-chain data. However, the rapid growth in the volume of borrowed funds raises doubts about the stability of this success. Experts debate: has the market formed a real bottom, or is this another false bounce within a global downtrend?
Ethereum Holds the Monthly VWAP Line Again
On June 14, the Ethereum exchange rate rose above the monthly VWAP (Volume-Weighted Average Price) line. This indicator serves as a dividing line for large players between the accumulation and distribution phases of assets. Previous breaks of this level led to similar results: after the April breakout above VWAP, the coin rose by 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 indicates that institutions begin actively buying at the first signs of an uptrend. Of course, it is difficult to establish a direct cause-and-effect relationship here, but the correlation repeats regularly, so investors should closely monitor fund statistics.
Spot ETF Flows Turn Positive Again After a Tough Streak
The sentiment shift happened just in time. The day after the exchange rate held above the VWAP line, on June 15, net inflows into spot ETH ETFs reached $22.5 million. This positive result broke a very painful series 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 string of successful days. Therefore, if the 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, 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 drop. According to Santiment analysts, since June 10, the balances of millionaire wallets have risen 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.
Alongside this, 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 deficit has formed in the market, which usually heralds an imminent trend change.
Analysts from 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 Levels for Ethereum Have Emerged
Currently, Ethereum is trading around $1,771, holding above the monthly VWAP, which is at $1,705. 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 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, peaking above $10.27 billion. Typically, a reliable support 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 state of affairs 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 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 is the low of $1,507. A daily close below this level 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.
Expert Opinion: The accumulation of $950 million by whales is a powerful bullish signal, but it is not yet supported by a reduction in leverage. The derivatives market remains overheated, and without its "cleansing," any growth will be vulnerable to sharp corrections. Investors should be cautious and not succumb to euphoria from the first bounce.