Blackrock Sells BTC to Buy $18.5M ETH: Ethereum Price Heading to $2,600 in October

Ethereum Price Analysis:

Ethereum price reached a weekly timeframe peak of $2.485 on Oct 12, up 7% in 48-hours as dovish US CPI report sparked increased demand for risk assets. On-chain data trends revealed BlackRock began selling Bitcoin (BTC) to buy large units of Ethereum (ETH).

Technical indicators offer key insights into how ETH price could potentially react to tis in the short-term.

Traders React to Blackrock Dumping BTC for Ethereum

Ethereum price has delivered considerable gains in the last 48-hours. The rally has been largely driven by growing bullish tailwinds from the hotter-than-expected US CPI report published on Oct 10.

The ETHUSD chart below shows how ETH price narrowly avoided a breakdown below $2,400 on Oct 10. But as the dovish CPI figures hints at another rate cut ahead, ETH price has rapidly rebounded 6.6%, rising as high at $2,485 by the time of writing on Oct 12.

Fresh on-chain movements have reveals a conspicuous move from BlackRock, which could potentially propel ETH prices further upwards.

On Oct 11, Lookonchain, a blockchain analytics outlet, uncovered a series of large transactions, showing the world’s largest asset manager selling millions worth of Bitcoin (BTC), just before adding to its Ethereum (ETH) balances.

As depicted above, Lookonchain disclosed how BlackRock recently sold off 182 BTC, valued at $11.34 million. Around the same period, the blockchain analytics tool recorded BlackRock purchasing 7,574 ETH, worth approximately $18.52 million.

BlackRock recently sold off 182 BTC, valued at $11.34 million, just before purchasing 7,574 ETH, worth approximately $18.52 million.

This development has sparked varying reactions among market watchers and crypto trading enthusiasts.

Some market analysts believe this signals BlackRock’s long-term bullish outlook on ETH’s potential to deliver higher yields. If this trend continues, ETH’s price could rally past the $2,600 barrier by the end of October.

However, others caution that BlackRock’s activity may be tied to client-driven ETF trades rather than a broader strategic shift.

Kevin Oakeson, CEO of HMNBRDNetwork, commented on this trend, emphasizing the distinction between the asset manager’s operational decisions and client-driven portfolio moves.

“It’s vital to differentiate between products held for clients through ETFs and actual long-term strategic positions. What we’re seeing with BlackRock is likely influenced by client demand more than anything else.” – Kevin Oakeson, via X, Oct 11, 2024.

Despite these discussions, BlackRock’s portfolio remains heavily skewed toward Bitcoin, holding 369,640 BTC (valued at $23.02 billion). Its Ethereum holdings, at 414,168 ETH, amount to a more modest $1.01 billion.

“It’s important for people to understand what is being bought and sold for their financial products and what they are holding on the corporate balance sheet, two very different things. The ETF is fueled by people buying and selling those products, not really their choice.

– Kevin Oakeson, CEO, HMNBRDNetwork, via X/KO_Markets | Oct 11, 2024.

BlackRock‘s crypto holdings remains heavily skewed towards. At the time of writing on Oct 12, BlackRock holds approximately 369,640 BTC, valued at an impressive $23.02 billion.

In comparison, the investment giant’s current Ethereum holdings amount to 414,168 ETH, valued of at $1.01 billion, highlighting a 95% gap in the allocation between the two top-ranked cryptocurrencies.

Increased flow of funds into Blackrock’s Ethereum ETF could mean that dovish macroeconomic landscape is now gradually improving adoption of ETH ETFs, which have struggled to get going since the US SEC approved an official launch in late July.

ETH yield from PoS staking could also potentially incentivize more inflows, as crypto market heads into another uptrend amid expectations of more rate cuts.

With the next FOMC meeting slated for Nov 7, steady whale inflows could potentially drive ETH price above the looming $2,600 sell-wall by the end of October.

Ethereum Still Facing $300M Resistance

Ethereum price has gained 7% in 48 hours, lifted by dovish US CPI and 20M inflows from Blackrock. Despite this, Ehereum still faces a daunting challenge reclaiming $2,600 level.

Derivatives markets data show that at the time of writing Ethereum bear traders have mounted over $337 million worth of short positions against ETH.

Notably, over 90% ($317 million) of those SHORT contracts are clustered around the $2,590 level.

Currently, bulls are firmly in control of the ETHUSD futures markets with active LONG positions towering above $550 million. However, the $317 million cluster around the $2,590 could potentially slow down Ethereum’s ascent in the days ahead.

In the near-term, the resolution of these cluster of short contracts could dictate whether ETH breaks out or retreats to retest lower support levels.

ETH Price Prediction: $2,600 Breakout in October Remains Viable

From a technical perspective, ETH is positioned at a critical juncture. The 4-hour chart shows strong support between $2,420 and $2,450, bolstered by recent bullish momentum from BlackRock’s purchases. The next key resistance is at $2,500, with the primary resistance looming at $2,600.

Indicators like the Relative Strength Index (RSI) are approaching overbought territory, suggesting some near-term selling pressure. However, as long as Ethereum remains above the $2,450 support level, the path to a $2,600 breakout remains intact.

Based on the current ETH SHORT contracts set up, bulls may need to absorb additional selling pressure around $2,590. But with institutional demand in play and macroeconomic tailwinds, a sustained break above $2,600 could set the stage for a move toward $2,700 in the coming weeks.