Ethereum whales have increased their positions by $950 million: is a bottom forming for ether?
The price of Ethereum (ETH) has bounced 22% from its June low, holding above a key trendline for institutional investors. This move coincides with renewed inflows into spot ETH ETFs, which had been recording capital outflows for weeks. However, despite the positive signals, the market is not yet rushing to declare a final bottom.
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 casts doubt on 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. I tend to believe that several more trading sessions will be needed for a final verdict.
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 large players between the accumulation and distribution phases of assets. Previous breaks 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, capital inflows into spot ETFs resumed a few days after the breakout. This dynamic suggests that institutions begin actively buying at the first signs of an uptrend. Of course, it is difficult to establish a direct causal link 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 came at a very opportune time. Literally the day after the exchange rate stabilized above the VWAP line, on June 15, net inflows into spot ETH ETFs amounted to $22.5 million. This positive result broke an extremely 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 could see a repeat of this positive scenario. However, relying solely on ETFs would be a mistake, as key processes are now happening 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 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 bought coins worth a total of approximately $950 million.
Concurrently, 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 positions on exchanges 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 are quickly buying 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, in their latest 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 reversal in quotes.
The current reduction in exchange balances confirms that the acute phase of selling 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, peaking above $10.27 billion. Typically, a reliable foundation 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 genuine 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 will be the $1,624 level, 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 break of the $1,851 barrier will help distinguish a true bottom from a temporary bounce.
My analysis shows that the current situation is a classic dilemma between fundamental accumulation and speculative overheating. Whales and ETFs clearly signal long-term confidence, but the growing open interest in futures creates a high risk of short-term volatility. Until $1,851 is taken, I would refrain from aggressive buying.