Ethereum whales have bought ETH worth $950 million: is a bottom forming or is this just a false bounce?
The price of Ethereum (ETH) has made an impressive 22% rebound from its June low, allowing quotes to settle above the key trend line for institutional investors. This rise coincided with renewed inflows into spot ETH ETFs, which had been recording capital outflows for weeks. However, despite the positive momentum, I believe it is too early to declare the correction over — the market is still in a zone of uncertainty.
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 major players between the accumulation and distribution phases of assets. Previous breakouts of this level led to similar results: after the April breakout above VWAP, the coin appreciated 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 suggests that institutions begin actively buying at the first signs of an upward trend. Of course, it is difficult to establish a direct causal link here, but the correlation repeats regularly, and 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 exchange rate settled 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: from May 11 to June 12, capital outflows were recorded almost daily, with only two trading sessions as exceptions.
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 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 data from 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 up coins worth a total of about $950 million.
In parallel, on-chain metrics recorded a decline in seller activity. Mass panic in the market ceased around June 7, when the coin hit a local low. It was then that the net change in exchange positions indicator went 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 from Swissblock noted in their latest report that Ethereum has been in a capitulation phase for a long time, and the current reduction in exchange balances confirms that the acute selling phase appears to be truly behind us.
Key Levels for Ethereum Have Emerged
At the moment, 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 upward trend, buyers need to close the 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 situation 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 will be the low of $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 rebound.
My opinion: The actions of whales and the resumption of ETF inflows are undoubtedly positive signals. However, the rise in open interest against the backdrop of a price increase is a classic sign of a speculative bubble that could burst at any moment. I would not rush to conclusions about the formation of a bottom until the market clears excess leverage and breaks through the $1,851 level with confident volume.