Bitcoin Hits 18-Month High, Then Retracts. Grand Ether Surge Takes Over the Market
Bitcoin experienced a surge to an 18-month high, nearing $38,000, before encountering a sharp pullback. Meanwhile, Ether (ETH) stole the spotlight by soaring 10% to almost $2,100 following Nasdaq’s confirmation of BlackRock’s plan to file for an ETH-based ETF. Despite Bitcoin’s reversal to around $36,300, Ether surge maintained its momentum with a 10% increase in the past 24 hours.
BlackRock’s ETH ETF Plans Ignite Market Action
Corporate Entity Filing Triggers ETH Rally
BlackRock’s strategic move to list an ETH exchange-traded fund (ETF) prompted significant market reactions. ETH surged past $2,000 after a filing revealed the registration of “iShares Ethereum Trust” in Delaware, mirroring a similar pattern seen with BlackRock’s iShares Bitcoin Trust in June. Subsequently, a Nasdaq filing confirmed BlackRock’s intention to launch a free Ethereum-focused ETF.
Altcoins Experience Sell-Off Amid ETH, BTC Strength
Altcoins Retreat as Major Cryptos Shine
While Ether (ETH) and Bitcoin (BTC) showcased strength, most alternative cryptocurrencies, or altcoins, faced a sell-off. Ripple’s XRP, dogecoin (DOGE), uniswap (UNI), and Stellar’s XLM witnessed declines of 6%-7%, while toncoin (TON) retreated 10%. Interestingly, governance tokens of top ETH liquid staking platforms, Lido’s (LDO) and RocketPool’s (RPL), defied the trend, recording gains of 18% and 23%, respectively.
Market Divergence and Traditional Market Impact
Altcoin Weakness Amidst Market Volatility
The divergence between major crypto assets and the broader market became evident as altcoins struggled. A generally risk-off day in traditional markets, triggered by Federal Reserve Chair Jerome Powell’s hawkish stance on interest rates, contributed to altcoin weakness. U.S. equities, including the S&P 500 and Nasdaq indexes, experienced a nearly 1% decline.
Significance of BlackRock’s ETH ETF Application
Spot BTC and ETH ETFs: Is Ethereum a good investment?
Market observers emphasize the potential impact of a spot Bitcoin (BTC) ETF, anticipating increased participation from sophisticated investors. BlackRock‘s move to consider an ETH-focused ETF follows the success of similar filings for Bitcoin. A spot ETH ETF, if approved, could offer a regulated and accessible avenue for institutions and consumers to engage in the growing 1 Ethereum in Dollars rate, mirroring the potential effects of a BTC counterpart.
Bitcoin’s Short Squeeze Amid ETF Optimism
BTC Surpasses $37K, Triggering Short Squeeze
Bitcoin’s surge beyond $37,000 marked a significant milestone, reaching levels not seen since May 2022. The upward movement triggered a short squeeze, with over $62 million in Bitcoin shorts liquidated in the past 24 hours. This surge is fueled by growing optimism surrounding U.S. regulatory approval for ETFs holding Bitcoin. The recent report of talks between the Securities and Exchange Commission and Grayscale Investments further boosted expectations for Bitcoin ETF approval.
Short Squeeze Dynamics and Analyst Predictions
Unusual Conditions Propel Bitcoin Prices Higher
A short squeeze, characterized by a rapid Ether surge, played a role in the sudden rise in Bitcoin prices. Short sellers, anticipating a decline, exited their positions in a rush, creating a buying frenzy. Liquidations totalling just under $50 million occurred during early Asian trading hours, emphasizing the influence of market dynamics in Asia. Analysts at Bloomberg Intelligence reasserted a “90% chance” of a spot Bitcoin ETF approval in the U.S., emphasizing the potential for a launch by January.