Because they could not hold the support levels, bitcoin prices fell last week after trading in the $24k range for several weeks. The bitcoin price has now been trading at the $21k zone, where it has remained all weekend. The 24-hour trading volume for Bitcoin, Ethereum, and other key crypto assets has not changed much, but the price has on this Monday’s cryptocurrency marketplaces.
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The biggest Bitcoin story right now is the dramatic drop in transaction fees. The average cost of a Bitcoin transaction dropped below $1, the lowest level in the preceding two years.
At writing, ycharts reports that the typical bitcoin transaction fee is $0.8246, which is the lowest figure since April 2020.
Contrary to common belief, the average daily transaction volume and the total number of transactions in a block remained relatively constant throughout the past year. As a result, the decrease in transaction fees is most likely the effect of both growing mining difficulty and falling market prices, which together cause less of a backlog in BTC’s mempool and consequently reduce transaction costs.
In related news, because Bitcoin closely resembles the price movement of the stock market, it’s critical to remember the current situation of traditional markets. According to a report from CNBC today, the Dow futures are down 300 points to start the week, and the S&P 500 and NASDAQ futures are down more than 1%.
The slump in the U.S. markets parallels the sharp declines in the European markets as worries about upcoming rate rises from the Federal Reserve and the European Central Bank reemerge. Increases in interest rates are meant to boost the global economy and curb inflation, but they can cause stock markets to fall as investors pull their money out of stocks and invest it in cash.
Rising interest rates always cause market trepidation and uncertainty, as we have already witnessed the impact of this increase on the whole crypto market a few months ago.
Given that it is being tested, the present $21k level will probably continue to act as a support for the price of bitcoin this week. While the global markets are still struggling, it is unlikely that Bitcoin (BTC) will soon recover to the previous $24k levels. This indicates that different dips could be anticipated and will occur after BTC breaks through the current level of support.
After hitting 46 when Bitcoin was around $25k, the Fear and Greed Index for Bitcoin is currently at 29, indicating Fear in the markets.
However, because Bitcoin inexplicably tracks the movement of the tech markets, its price will undoubtedly continue to grow if the tech markets see another bull run.
Bitcoin, which has a $405 billion market cap and is now selling at $21,217, continues to rule the whole cryptocurrency market. Unfortunately, Ethereum underperformed this week, losing more than 17% in the previous seven days. As a result, its market value, which is now $190 billion, has fallen below $200 billion.
Last but not least, despite the significant sell-off and continuous falls, the market value of cryptocurrencies worldwide is still above $1 trillion. It should stay close to this range for the rest of the week.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any service.
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