Ethereum Rebounds as Whales Absorb Supply – Can ETH Maintain Its Position Above $2.2K?

Following a recent decline, Ethereum (ETH) has seen a rebound as large buyers, often referred to as "whales," absorb supply at lower price levels. With significant accumulation taking place below the key resistance levels, the question remains whether ETH can maintain its position above $2.2K amid broader market trends.

Key Takeaways

Large off-market buyers have accumulated approximately 33,000 ETH in a single day.
ETH's price is stabilizing within a descending channel after hitting $2,261.
Indicators show that selling pressure is fading, but momentum needs further confirmation for a sustainable recovery.
Despite short-term volatility, top traders maintain a net-long position in Ethereum.
Funding rates are recovering, indicating cautious rebuilding of leverage.

Ethereum price rebounds as whales absorb supply — Can ETH extend this recovery?

Large Buyers Step in During Ethereum’s Decline

During Ethereum's recent decline, significant off-market purchases have been made, indicating strong demand. An over-the-counter (OTC) whale purchased 33,000 ETH in just one day, while wallets linked to DBS acquired nearly 25,000 ETH within a week, with an average entry price around $2,463. These buys occurred when ETH fell below $2,300, reflecting a proactive approach to absorb price dips rather than waiting for a market breakout. Notably, these transactions were predominantly off-exchange, and sellers didn't seem eager, allowing larger players to accumulate gradually. This behavior suggests a medium-term investment strategy rather than short-term trading.

Ethereum price action
Source: TradingView

Price Stabilization Within the Descending Channel

Ethereum remains within a defined descending channel on its daily chart. After testing the $2,261 support level, it rebounded towards the $2,320–$2,330 range and has since stabilized in the lower portion of the channel. Buyers quickly mitigated selling pressure to prevent a deeper breakdown, although the overall corrective trend continues. Immediate resistance is identified near $2,797, with $3,404 marking the upper boundary of the channel. Holding above $2,261 is crucial for maintaining a positive trajectory within the structure; losing this level could prompt a revisit to lower liquidity zones.

Ethereum's Relative Strength Index (RSI) fell to 27 during the sell-off, indicating oversold conditions. However, it has begun to recover, showing that the selling pressure is easing. While buyers emerged as momentum waned, the RSI remained well below the neutral 50 mark, suggesting that while momentum has stabilized, it has not yet become bullish. Similar patterns in past cycles often resulted in either consolidation or modest recoveries rather than immediate reversals, indicating that Ethereum might still have room to stabilize within its range.

Traders Remain Net-Long Despite Volatility

Despite Ethereum's recent sharp pullback, top traders on Binance are predominantly optimistic. Long positions currently dominate the market at 77.46%, whereas shorts account for 22.54%, resulting in a long-to-short ratio of approximately 3.44. Traders have retained their positions even when price tested key support levels, showcasing their confidence, albeit with a potential concentration risk. A heavily skewed long bias could amplify market volatility should the price hesitate. Still, traders seem comfortable maintaining their exposure, reflecting optimistic views consistent with the off-market buying trends observed during ETH's dip.

Source: CryptoQuant

Recovery in Ethereum Funding Signals Repositioning

Funding rates have also demonstrated improvement alongside Ethereum's price recovery. Currently, rates stand at approximately 0.009191 and have surged by over 104% from recent lows. This indicates that traders are repositioning rather than aggressively unwinding their leverage. Meanwhile, Open Interest is around $13.4 billion, marking a daily increase of more than 4%. This uptick in Open Interest verifies that new positions are being established as the price stabilizes, with leverage slowly rebuilding rather than chasing upward momentum. This balance allows for a gradual recovery without the risk of excessive pressure from over-leveraged positions.

Ethereum Funding Rates
Source: CryptoQuant

Assessing Whether Ethereum is Forming a Base

The current recovery in Ethereum reflects a synchronized approach among market flows, derivatives, and structural influences. Large players are actively absorbing supply during periods of weakness, while traders maintain their long exposures and begin cautiously rebuilding leverage. This behavior implies a trend towards stabilization rather than panic-driven selling. However, as the price remains within the descending channel and momentum stays below neutral, it’s essential to maintain the $2,261 support level. Continued acceptance above this level, coupled with improvements in funding rates, could pave the way for a rise toward $2,797. Conversely, failing to hold this support could test trader confidence swiftly. Current metrics suggest Ethereum is more likely to be building a solid base rather than experiencing a mere short-lived bounce.

Final Thoughts

As Ethereum navigates through current market conditions, its capacity to absorb downside risks and rebuild confidence will be critical. Whales' strategic entries and traders' optimistic positioning may indicate a potential for renewed growth in ETH’s price trajectory. Observers will keenly watch to see if this momentum can be sustained and whether Ethereum can reinforce its place above the pivotal $2,261 support.