Bitcoin dropped 4.2% over the weekend, bringing its value down to $28,000. Regular losses in the cryptocurrency market might be expected. Since last Friday, the value of Ethereum, the second-largest cryptocurrency, has decreased by 6%. The combined market valuation of Bitcoin (BTC) and Ethereum (ETH) has dropped 3.1% to $541.42 billion and 2.35 percent to $223.85 billion over the past 24 hours, respectively.
Since there is rarely just one explanation, it is crucial to examine Bitcoin’s most recent price change from various angles. One thing stands out right now: the exceptionally high prices connected with BTC transactions because of the Bitcoin network’s congestion.
Bitcoin Ordinals and the new BRC-20 token standard are to blame for the congestion. Since its inception in early March, individuals have had another option for making fungible tokens aside from Bitcoin. As a result of the meme coin community’s enthusiastic reception of this new token standard, its daily transaction volume and market cap have exploded this week to almost $160 million.
A big backlog of outstanding withdrawals is the reason Binance temporarily suspended Bitcoin withdrawals again a few hours ago. As of the 8th of May, Binance announced through Twitter that BTC withdrawals were “temporarily” disabled due to “a large volume of pending transactions.”
We've temporarily closed #BTC withdrawals due to the large volume of pending transactions.— Binance (@binance) May 8, 2023
Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible.
Rest assured, funds are SAFU.
BRC-20 tokens on the Bitcoin blockchain have become increasingly popular, leading to a jump in network demand. According to Galaxy Research, on May 2, 50% of all Bitcoin transactions were made using BRC-20 tokens. It resulted in Bitcoin transaction costs reaching an all-time high.
According to Binance, Bitcoin network fuel fees have suddenly increased. However, the price tag didn’t reflect the unexpected increase. Because of this unexpected fee increase, the exchange would likely revise its operational fees.
Due to the increased demand for Bitcoin, Binance saw more withdrawals than usual. According to CryptoQuant, Binance saw the largest Bitcoin withdrawal in the history of cryptocurrencies, totaling over 162,000 BTC.