Ethereum Rebound 11% on Accumulation, But Whale Exits Pose Risk

Ethereum [ETH] has experienced an 11% rebound from its recent multi-year low, driven by significant accumulation. On-chain data indicates that 380,000 ETH was acquired at the $1,461 level, with an additional 453,000 ETH absorbed over the past five days. This concentrated bid zone suggests the formation of a potential market bottom. However, the nature of this liquidity influx is crucial to discern. If the capital is predominantly entering through spot markets, it may signal genuine buying interest, potentially marking a strong entry point for investors. Conversely, if positioning is leverage-heavy, the market would be vulnerable to downside volatility, especially in a risk-off environment where overleveraging can lead to rapid price corrections.

At the time of writing, ETH was trading at $1,567, marking an 11% rebound from its recent local low of $1,412 five days ago. In a market swinging between low prices and high risk, the current setup raises the question: is it a trap or a golden opportunity? The subsequent buying frenzy was logical, reflecting the greed side of the market. However, recent analysis revealed that dormant whale wallets are beginning to realize losses, with notable capital rotation. This reflected fear-based flows. For ETH to breach key resistance levels, market psychology must decisively tilt towards greed. The $1,461 zone has emerged as a potential support base, backed by 380,000 ETH in active accumulation. Meanwhile, Ethereum has remained range-bound between the $1,548 and $1,599 resistance zones where 793,900 and 732,400 ETH, respectively, are held. This buying activity alluded to rising greed-driven sentiment. In a bullish environment, such accumulation often marks a market bottom. However, with the Net Unrealized Profit/Loss (NUPL) still in capitulation and Fear, Uncertainty, and Doubt (FUD) running high, the rally seemed to lack clear confirmation.

If this accumulation isn’t supported by spot demand or institutional inflows, there’s a risk that buyers currently in unrealized losses may exit at breakeven, potentially triggering a local breakdown. Therefore, for this to be confirmed as a strong entry point for investors, several key conditions must align. Over the past week, 100,000 ETH has flowed into spot exchanges, with net inflows indicating sell-side pressure as market participants looked to liquidate positions. Meanwhile, the derivatives market recorded 60,000 ETH in outflows, reflecting leverage-driven demand. Additionally, Funding Rates (FR) have remained positive, reinforcing a long-heavy bias across futures. While the structure was bullish, the setup will turn precarious when spot demand fails to support derivative-driven momentum. In such cases, failure to clear overhead resistance could trigger cascade liquidations, especially if recent dip-buyers rotate out for profit-taking.

Adding to the caution, mega whale wallets (>10,000 ETH) dropped to 875 – An eight-year low, down from 1,000 just last month. This distribution phase aligned with ETH’s $2,600 local top on 21 February. Against this backdrop, ETH reclaiming the $2,000-handle looks structurally challenging. Despite visible accumulation, the positioning seemed to be leverage-skewed, lacking conviction from spot or institutional flows. As a result, the current setup bore all the hallmarks of a bull trap. Speculative greed drives the upside. However, whale exits, profit-taking, and derivative over-exposure threaten to drag Ethereum back below $1,400 before the market can confirm any sustainable bottom.