Bitcoin fees plummet 95% as BTC price recovers from US gov't scare
Bitcoin (BTC) struggled to recover from fresh losses on May 11 as a false alarm over United States government sales spooked markets.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewAnalysts deny U.S. government BTC sales
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $27,400 at the time of writing.
The pair had seen a flash sell-off the day prior, briefly taking it to $26,850 after claims that confiscated BTC held by the U.S. government was being sold off.
This was subsequently disproved, but for already sensitive crypto markets, the damage was done.
Glassnode not showing any decline in the US Government's Bitcoin balance
4 pic.twitter.com/rJHcQ2B8Kc
— Will Clemente (@WClementeIII) May 10, 2023Among traders, Jackis described the local lows as a “scam” move, while forecasting lower levels to come.
“When the move feels like a scam and trades likes a scam then treat it like it,” he tweeted.
“I do expect a breakdown lower sooner or later. I'm not yet sure how deep but prepared to act quickly if neccessary.”Fellow trader Anbessa also confirmed that he was looking for further downside, like various others focusing on a target zone around the $25,000 mark.
#Bitcoin Roof Pattern
Consolidation at neckline $27369
after nailing all shorts starting from $30,4k
1.LONG breakout $27666 if you're tethered or
2.LONG here with a Stop Loss sub $27269
HTF pattern breakout above $28882
while I'm still looking for a throwback to $25,2k… pic.twitter.com/TYZXGyxNFz
Financial commentator Tedtalksmacro meanwhile called May 10 “just another day in crypto.”
In a Twitter summary of the day’s events, he added that U.S. inflation data had delivered for risk asset bulls, implying ongoing declines to come in the next few months.
Next-block Bitcoin fee dips under $2
In a silver lining for Bitcoiners, the past 24 hours saw a major shift in on-chain transaction fees, these deflating considerably after reaching levels which had caused widespread uproar.
Related: Binance ‘FUD’ meets CPI — 5 things to know in Bitcoin this week
Live numbers from Mempool.space had next-block fee rates at 47 satoshis per byte at the time of writing, or just $1.80.
According to data from monitoring resource BitInfoCharts, even on May 10, the average fee had fallen below $15 — a drop of over 50% versus the day prior.
Reacting, Checkmate, lead on-chain analyst at Glassnode, took to task those who had called for code-changing measures to prevent fees from rising so heavily in future.
As Cointelegraph reported, fees had surged as a result of ordinals inscriptions greatly increasing on-chain activity and demand for block space.
“24hrs later, the average fees paid per block has returned to ~1.0 $BTC per block. Imagine arguing to change Bitcoin rules for a short-term fee spike due to people using the chain in ways you don't agree with,” he tweeted alongside a chart.
“Trying to change the rules is the attack, not the inscriptions.”
Bitcoin Average Fee Paid Per Block chart. Source: Checkmate/ TwitterMagazine: Unstablecoins: Depegging, bank runs and other risks loom
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.