- Bitcoin’s total number of transactions has fallen over the past seven days.
- Bitcoin rose to $42,000 at the start of the weekend
Transaction fees at major blockchain networks have fallen dramatically in recent days, raising concerns about lower demand and adoption.
Less network usage
Bitcoin [BTC] and ether [ETH] witnessed a more than 30% shrinkage in the money users paid to get their on-chain transactions validated and added to the ledger, according to the blockchain analytics firm InTheBlok.
Bitcoin in particular saw a nearly 40% reduction in fees collected this past week. IntoTheBlock attributed this to the drop in market volatility, which made users less eager to validate their trades and increase fees.
AMBCrypto analyzed Santiment’s data and found a significant reduction in the number of Bitcoin transactions over the past seven days.
The number of daily transactions even fell to around 340,000 on January 25, the lowest in three months and 30% lower than a week earlier.
Source: Glassnode
In addition, average transaction costs continued to decline throughout the month. From $15.83 on January 14, the average cost dropped 70% to $4.58 at the time of writing.
These indicators suggested that congestion on the network was less, lending credence to the findings earlier in this piece.
Miners aren’t really worried
Interestingly, the drop in transaction fees didn’t seem to hurt miners’ pockets. Total miner revenue, including fixed block rewards, has increased by 35% over the past 10 days, as shown below.
However, it should be noted that daily miner revenues have dropped significantly since December last year, when the inscription craze had taken over blockchains.
Source: Glassnode
What can you expect from Bitcoin now?
Bitcoin rose to $42,000 as the weekend started, the first such instance in more than a week, according to CoinMarketCap.
This pushed the king coin’s 24-hour gain to over 4%, reversing the losses made during the week.
Read BTC price forecast for 2023-2024
Since the day ETFs were approved by regulators to trade in the US, Bitcoin has ironically lost 14.5% of its value.
While much of the blame went to the outflows from Grayscale Bitcoin Trust ETF, according to a recent report from Coin shares considered macroeconomic factors equally responsible for the downturn.
“We believe that the recent decline in the probability of a rate cut in March has also negatively impacted Bitcoin prices. Now, despite positive economic data, the Fed could still choose to cut rates. It’s a delicate balance. Digital asset investors should keep an eye on the bigger picture and closely monitor the Fed’s comments in the coming months.”