Bitcoin. Source: Adobe
The average fee for conducting a transaction on the Bitcoin network has just rocketed to its highest level in almost two years, according to data from crypto on-chain analytics firm Glassnode.
On Friday, the average transaction fee was 0.00032814 BTC, up more than 10-fold from a drop to 0.00003161 on April 23.
At the current bitcoin price of around $29,600, that means a transaction fee of almost $10.
That’s a more than 10x increase from the average transaction price of under $1.0 on April 23 (when bitcoin price was hovering in the low $27,000 range).
Analysts have attributed the surge in network fees to a renewed memecoin craze (PEPE and other smaller memecoin rivals like SPONGE have posted exponential gains in recent sessions), which has fueled a spike in transactions related to so-called BRC-20 triggered token.
The experimental new BRC-20 token standard took inspiration from the hugely successful ecosystem of ERC-20 crypto tokens that exist on the Ethereum blockchain and has taken Bitcoin by storm since its launch in March.
The standard allows users to issue and transfer fungible tokens across the Bitcoin blockchain.
The BRC-20 craze hasn’t just triggered a spike in network fees.
Daily bitcoin transactions hit an all-time high of around 680,000 earlier this week.
Meanwhile, higher fees are bringing bitcoin miners online.
Earlier this week, the Bitcoin network hash rate hit an all-time high of nearly 440 exahashes per second.
And the growing BRC-20 craze appears to be bringing new users to the network.
Addresses with non-zero BTC balances just hit a new record high of over 46 million.
Where Next for BTC Price?
Signs of strength in the Bitcoin network, as its “use case” is likely to be expanded by the growing BRC-20 movement, should provide long-term tailwinds for the world’s largest cryptocurrency by market cap.
But in the short term, Bitcoin appears to be more focused on macro and technical factors.
Regarding the latter, risks for Bitcoin appear to be on the upside in the near-term as the Fed’s rate-hiking cycle now appears to be over and a rate-cutting cycle is likely to begin later this year, and as the US banking crisis appears to be snowballing.
Bitcoin typically performs well in an environment of easy financial conditions, and since March it has derived a safe haven supply from concerns about financial stability amid rising demand for “hard money” alternatives to traditional currencies (hence gold rallied to the end). ). at record high).
Meanwhile, Bitcoin’s short-term technicals also look solid.
The cryptocurrency is looking for a bullish breakout from a pennant structure it has been locked in since mid-April.
If Bitcoin can break and sustain above $30,000 in the next few days, the door should be open for a quick bounce back to yearly highs in the $31,000 ranges and beyond.
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