Crypto news

Ethereum (ETH) bounced 22% from its June low, holding above a key trendline for institutional investors. This rally coincided with renewed inflows into spot ETH ETFs, which had been recording capital outflows for weeks.

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 the success. 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, 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. 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 start buying actively at the first signs of an uptrend. Of course, it is difficult to establish a direct causal link here, as events may simply reflect overall 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 just in 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 a very painful series of declines. In fact, 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 string of successful days. Therefore, 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 taking place 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 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 bought coins worth a total of about $950 million.

In parallel, on-chain metrics recorded a decline in seller activity. Mass panic in the market stopped around June 7, when the coin found a local bottom. 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 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 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 for Ethereum 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 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 jumped from $8.86 billion to $9.96 billion, peaking above $10.27 billion.

Usually, a reliable support for growth forms only after the complete liquidation of excess 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 will be the $1,624 level, and the critical point is the low at $1,507. A daily close below this mark 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 analysis: the combination of active whale accumulation and renewed ETF inflows is a strong bullish signal, but the growing open interest in futures adds significant risk. Until the market clears excess leverage, any bounce could be a trap. The key point is whether ETH can confidently hold above $1,851 and maintain this position.