Crypto rallies as ‘gas’ prices rise
By Robert Davis
21:11, 29 October 2021
The cryptocurrency market got a boost from rising "gas" prices on Friday as assets like Ethereum and Bitcoin crossed important thresholds.
Ethereum reached a record high of $4,453.88 (£3,277.25) by noon while Bitcoin passed the $62,000 per-unit mark at nearly the same time, according to trading data from CoinMarketCap.
Gas, in this sense, does not refer to oil, rather to a computational resource called Ether that the Ethereum network needs to facilitate transactions, like how cars need gas to run.
Meanwhile, joke tokens Shiba Inu (SHIB) and Dogecoin (DOGE) continued to trade barbs. SHIB has outpaced DOGE in trading volume over the last 24 hours, but analysts say DOGE’s rising price spells bad news for its counterpart.
SHIB and DOGE
While both Bitcoin and Ethereum seem to benefit from recent market liquidations, analysts at Delphi say the rising gas prices for Ethereum are helping to boost SHIB and DOGE.
The average Ether price currently stands at 193.08ETH, up more than 11% from Thursday. Gas was as low as 80.01 as recently as 24 October, according to data from YCharts.
What is your sentiment on ETH/USD?
Transaction costs
Transaction costs on the Ethereum network are calculated by multiplying the gas limit by the gas price. Ethereum typically recommends having at least 0.1ETH for a transaction of at least two units.
Because of this movement, Delphi analysts suspect Ethereum gas looks like it's “about to make a run higher,” which could boost nearly all decentralised finance (DeFi) tokens.
However, this rising tide may not benefit SHIB token holders. Even though SHIB saw nearly $224bn in transaction activity on Thursday, Delphi analysts say DOGE’s recent rally is indicative of investors “jumping from one asset to the other,” according to a note published on Thursday.
Bitcoin and Ethereum
According to an analysis of trading data by CoinTelegraph, Bitcoin and Ethereum’s recent movement shows there was considerable “buying the dip” action recently.
The analysts expect Bitcoin to reach its next resistance level near the $67,000 mark. If it can surpass that level, CoinTelegraph analysts project it could reach their price target of $89,000.
The same analysts also said Ethereum needs to show it can sustain a price of near $4,375 if the asset is going to continue to climb in value. Otherwise, they anticipate the asset could drop to as low as $3,888 per unit before entering a deeper correction.
So far this year, Bitcoin has returned 115% to its investors while Ethereum has returned nearly 500%.
Squid Token
Other joke cryptocurrencies, such as the Squid Games coin, entered the market on Friday.
The asset, known as Squid Token, was up more than 72,000% during its first day of trading, rounding out at $8.94 by 17:00 EDT.
Read more: Squid token, based on popular Netflix show, up over 72,000%
Related topics