- Bitcoin’s total transaction count plunged in the last seven days.
- Bitcoin ascended to $42,000 as the weekend started
Transaction fees across major blockchain networks declined drastically in recent days, raising concerns about lower demand and adoption.
Less network utilization
Bitcoin [BTC] and Ethereum [ETH] witnessed more than a 30% contraction in money paid by users to get their on-chain transactions validated and added to the ledger, according to blockchain analytics firm IntoTheBlock.
Bitcoin, especially, saw a nearly 40% reduction in fees collected over the past week. IntoTheBlock attributed this to drop in market volatility, which made users less eager to have their transactions validated and bid up fees.
AMBCrypto analyzed Santiment’s data and spotted a significant reduction in Bitcoin’s transaction count in the last seven days.
Indeed, the daily transactions plummeted to just about 340,000 on the 25th of January, the lowest in three months, and 30% lower than a week before.
Source: Glassnode
On top of this, the average transaction fees continued to slide throughout the month. From $15.83 on the 14th of January, the mean fees fell 70% to $4.58 at press time.
This indicators suggested that the congestion on the network was less, lending credence to the findings made earlier in this piece.
Miners are not really worried
Interestingly, the drop in transaction fees didn’t seem to dent miners’ pockets. The total miner earnings, which includes the fixed block rewards, spiked 35% in the last 10 days, as shown below.
However, it should be noted that the daily miner revenue has plummeted significantly since December last year, during which inscriptions craze had taken over blockchains.
Source: Glassnode
What to expect from Bitcoin next?
Bitcoin ascended to $42,000 as the weekend started, the first such instance in more than a week, according to CoinMarketCap.
With this, the king coin’s 24-hour gains surged to over 4%, reversing the losses made throughout the week.
Read BTC’s Price Prediction 2023-24
Since the day spot ETFs got regulatory approval to trade in the U.S., Bitcoin, ironically, has lost 14.5% of its value.
While much of the blame went to outflows from Grayscale Bitcoin Trust ETF, a recent report by CoinShares held macroeconomic factors equally responsible for the downturn.
“We think recent declines in the probability for a rate cut in March have also negatively impacted Bitcoin prices. Now, the Fed might still choose to cut rates despite positive economic data. It’s a delicate balance. Digital asset investors should keep an eye on the bigger picture and closely monitor FED comments in the next few months.”