Ethereum whales have accumulated $950 million: is a bottom forming for ether?
Ethereum (ETH) has made an impressive 22% rebound from its June low, managing to hold above a key trendline for institutional investors. This rally coincided with renewed capital inflows into spot ETH ETFs, which had been recording steady 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 leverage raises doubts about the stability of this success. Therefore, experts are debating whether the market has formed a real bottom or if this is another false rebound within a global downtrend.
Ethereum Holds the Monthly VWAP Line Again
In mid-June, specifically 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. For example, 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 at a very opportune 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 highly painful series of declines. 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 began with small amounts, which then grew into a string of successful days. Consequently, 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 taking place 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 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 bought coins worth a total of about $950 million.
At the same time, on-chain metrics recorded a decline in seller activity. Mass panic in the market 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 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 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 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. The total open interest in ETH futures has jumped from $8.86 billion to $9.96 billion, and at its peak exceeded $10.27 billion. Typically, a reliable foundation 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 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, and the critical point is 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 rebound.
My comment: The actions of whales and the resumption of ETF inflows are undoubtedly bullish signals. However, the rise in open interest alongside the price increase creates an extremely vulnerable structure. The market could be sitting on a powder keg: any negative trigger could trigger a cascade of liquidations that would wipe out all the gains of recent weeks. Therefore, I would recommend not rushing to conclusions about a bottom forming and waiting either for a confident breakout of $1,851 or a complete unloading of derivatives.