Bitcoin, Ethereum Soar – Beware of Pullbacks
Ethereum (ETH) captured the limelight from Bitcoin (BTC) on Thursday when the investment behemoth BlackRock indicated plans to introduce an ETH-based exchange-traded fund (ETF).
ETH’s price soared above the crucial $2,000 mark and reached a high of $2,131, climbing from just under $1,900. This comes after news that an entity called “iShares Ethereum Trust” had been established in Delaware, courtesy of BlackRock. This move echoes a similar sequence of events in June involving BlackRock’s iShares Bitcoin Trust, where a Delaware registration was soon followed by the formal ETF proposal.
Shortly after the Delaware registration was made public, a Nasdaq submission verified BlackRock’s intention to launch an ETF centered on Ether.
Meanwhile, Bitcoin reached a new 18-month peak, almost hitting $38,000, up from about $35,000, propelled by a short squeeze that coincided with the announcement of BlackRock’s Ethereum news. However, BTC experienced a downturn, falling as low as $35,785 and currently trading at $36,620.
Coins Are Going Up, But So Are The Fees
Following the recent crypto surge, users have been posting screenshots in the last day that display Ethereum and Bitcoin transaction fees in the 2-digit range (and even 3-digit in some cases).
One image illustrated a $220 Ethereum gas fee. The transaction was urgent (thus it’s normal for the fee to be higher) but it’s still a tremendous sum. Other posters showed fees close to $100.
On the Bitcoin side, the fees for priority processing were in the $10 range. Although this may seem modest compared to Ethereum, it’s noteworthy that the average transaction fee for Bitcoin has been around $1 for the past quarter, as reported by BitInfoCharts. These are the steepest fees Bitcoin has seen since May.
Chart Analysis – BTC/USD
This is one of the greatest climbs in recent times, for Bitcoin and the crypto market in general. But what goes up must come down and all rallies are followed by pullbacks.
Yes, the ETF craze is (maybe) just starting but all the people who bought at the beginning of the rally (think $27,000 – $30,000), are likely to Take Profit. And by Take Profit I mean close their buy trades. And considering that all longs are closed via a short, you can see how the selling pressure will increase.
Also, let’s not forget that the pair has been overbought since the first touch of $35,000 (on October 24). Although the price slowed down a little, we didn’t see a proper retracement. With all this in mind, the main bias is definitely bullish but expect some sort of pullback sooner rather than later.