Ethereum whales have accumulated $950 million: is a true bottom forming?
The price of Ethereum (ETH) has bounced 22% from its June low, managing to hold above a key trendline for institutional investors. This surge coincided with renewed capital inflows into spot ETH ETFs, which had been recording outflows for several weeks prior.
Large holders of the asset were not only unafraid of the decline but continued to actively accumulate coins, as evidenced by recent on-chain data. However, the rapid increase in leverage raises doubts about the stability of this success. The market is at a crossroads: experts debate whether a real bottom has formed or if we are witnessing another false bounce within a global downtrend.
Ethereum Holds the Monthly VWAP Line Again
On June 14, the Ethereum price rose above the monthly VWAP line — the volume-weighted average price that serves as a dividing line between accumulation and distribution phases for major players. Previous breaks of this indicator led to similar results: after the April breakout above VWAP, the coin gained 19%, while the May breakout brought a more modest 7% increase.
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, as events may simply reflect overall market optimism. Nevertheless, the correlation repeats regularly, prompting investors to closely monitor fund statistics.
Spot ETF Flows Turn Positive Again After a Tough Streak
The sentiment shift came just in time. Literally the day after the price held above the VWAP line, on June 15, net inflows into spot ETH ETFs reached $22.5 million. This positive result broke a painful streak of declines: from May 11 to June 12, capital outflows were recorded almost daily, with only two trading sessions in the green. 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, total net assets under management are approaching $10.04 billion. The recovery in May also began with small amounts that later grew into a series 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 occurring directly on-chain.
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 Santiment analysts, since June 10, the balances of millionaire wallets have risen from 124.85 million ETH to 125.4 million ETH. Thus, in just one week, they purchased coins worth approximately $950 million.
Alongside this, on-chain metrics recorded a decline in seller activity. Mass market panic subsided around June 7, when the coin hit 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 quickly buy up any available volumes. As a result, a seller shortage has formed in the market, which typically heralds an imminent trend reversal.
Analysts at Swissblock noted in their latest Altcoin Vector report that Ethereum had 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
Ethereum is currently trading around $1,771, holding above the monthly VWAP, which stands at $1,705. 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. Total open interest in ETH futures has surged 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 seeing the opposite process — open interest is rising along with the price. This situation indicates the dominance of margin traders rather than genuine spot market demand. Overloaded long positions could trigger a wave of forced liquidations at the slightest downward move, so it is too early to declare the end of capitulation.
If a decline begins, the first support level will be $1,624, with the critical point at the low of $1,507. A daily close below this level would force the market to seek new lows. Only a confident break above the $1,851 barrier will help distinguish a true bottom from a temporary bounce.
As an analyst, I believe that the current signals — whale accumulation, renewed ETF inflows, and declining exchange balances — do point to the formation of a local bottom. However, the high open interest in futures remains a "time bomb." The market either needs to "flush out" excess leverage through a sharp drop or receive a powerful catalyst to break above $1,851. Until then, every bounce will remain questionable.