Ethereum whales have accumulated $950 million: is the market preparing for a reversal or is this a trap?
The price of Ethereum (ETH) has rebounded 22% from its June low, allowing quotes to consolidate above a key trend line for institutional investors. The coincidence in timing with the resumption of inflows into spot ETH ETFs, which had been recording outflows for weeks, adds weight to arguments for a bottom formation.
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 borrowed volume raises doubts about the stability of this success. Therefore, experts debate whether the market has formed a real bottom or if this is another false bounce within a global downtrend.
Ethereum Holds the Monthly VWAP Line Again
In mid-June, specifically on the 14th, the Ethereum exchange rate rose above the monthly VWAP line. This volume-weighted average price serves as a dividing line for major 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 appreciated by 19%, while the May breakout brought a more modest 7% gain.
Notably, in both cases, a few days after the breakout, capital inflows into spot ETFs resumed. This dynamic indicates 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, so investors should closely monitor fund statistics.
Spot ETF Flows Turn Positive Again After a Tough Streak
The sentiment reversal came at a very opportune time. Literally the day after the rate consolidated above the VWAP line, on June 15, net inflows into spot ETH ETFs amounted to $22.5 million. This positive result broke a highly painful series of declines. Specifically, 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 began 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 found a local low. It was then that the net exchange position change indicator 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 promptly buy up any available volumes. As a result, a seller deficit has formed in the market, which typically heralds an imminent trend reversal.
Analysts from Swissblock, in their recent Altcoin Vector report, noted 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 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, peaking above $10.27 billion. Typically, a reliable foundation for growth forms only after the complete liquidation of excess leveraged positions. Currently, we are witnessing 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 talk about the end of capitulation.
If a decline begins, the first support level will be $1,624, with the critical point being 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 bounce.
Expert Opinion: Whale accumulation of $950 million and the resumption of ETF inflows are strong signals, but the growing open interest in derivatives makes the market vulnerable to sharp moves. A true bottom will only be confirmed after a complete clearing of excess long positions and a confident breakout above $1,851. For now, we are in a zone of uncertainty, where any move could equally be the start of a new trend or a trap.