On Feb 19, the BINANCE exchange announced that it would temporarily suspend Ethereum (ETH) withdrawals to address a congestion issue.
However, some traders insist that the platform had stopped withdrawing ETH at least an hour before the announcement was actually made.
Conspiracy Theories Anyone?
While Binance acknowledged a spike in Ethereum market activity, many believe that the congestion isn’t as bad as Binance claims and that it shouldn’t cause such a radical decision.
Ethereum is not even congested right now. Was way worse multiple times when withdrawals weren't suspended
— Larry Cermak (@lawmaster) February 19, 2021
Larry Cermak, a leading researcher at The Block, added that he had “withdrawals rejected more than an hour ago.” Some users also facing difficulties withdrawing their ETH reiterated that Binance may be doing something shady.
From this perspective, the crypto community’s concerns around centralized services are on full display.
This is what centralized exchanges do. Just like banks they control your funds and you are left helpless. ETH defi on the other hand gives you full control. Are low gas fees worth losing your financial freedom?
— MLSGRFX (@MLSGRFX) February 19, 2021
Was this an attempt to manipulate the market by further pumping Binance Coin (BNB)? It’s unclear yet. BNB has rocketed into the top three coins by market capitalization, stopping just short of $350 per token.
This happened for the first time in its history in response to considerable interest in the Binance Smart Chain (BSC) and its most prominent project PancakeSwap.
Over the past weeks, traders have been turning to Decentralized Exchanges (DEXs) built on BSC, searching for a cheaper experience. One user who was closely watching gas fees after Binance had suspended ETH withdrawals found an interesting correlation:
So binance stopped withdrawals for an hour and gas fees dropped a lot, just goes to show who’s interest it’s in to keep gas fees high. Binance is a mafia.
— LitBit (@bittybitbit86) February 19, 2021
Thus, some view the latest Binance move as a marketing tactic to prove its prowess over Ethereum.
This feels like a declaration of war from Binance to Ethereum https://t.co/brgNXuLjVH
— Hasu (@hasufl) February 19, 2021
ETH Remains Strong
Nevertheless, Cermak said he doesn’t think that BSC will seriously threaten Ethereum in the long-term. He also emphasized that currently, retail investors step in to “gamble in DeFi,” which leads to newcomers “pricing out of Ethereum.” And the issue of decentralization will, for now, take a back seat.
Why is this happening? In retrospect, it was inevitable. Retail wants to gamble in DeFi and the vast majority of newcomers are priced out of Ethereum. Do they care about decentralization? Nope https://t.co/SqWOcgM9Q1
— Larry Cermak (@lawmaster) February 19, 2021
On Feb. 18, BeInCrypto reported that ethereum reached a new all-time high (ATH) of $1,944.12 on Binance. At press time, it had made another one above $1,950 per coin, just shy of that elusive $2,000 barrier.
ETH $2,000 in sight
— skew (@skewdotcom) February 19, 2021pic.twitter.com/XFR7akpsik
Ethereum technical indicators remain bullish. The relative strength index (RSI) has bounced at the 50-line, and the moving average convergence/divergence (MACD) histogram is approaching positive territory. All signs point towards continued price discovery for ETH.
