Bitcoin Price Declines Amid Network Congestion and Rising Transaction Fees

By: Eva Baxter

Bitcoin's price faced a dip starting the week in the red after a sudden surge in Ordinals minting resulted in a congested blockchain network. Major cryptocurrencies like Ethereum, Solana, Cardano, and Avalanche also reported considerable losses between 2% and 5% during trading hours. Amid the recent price decline, $166 million in losses were reported by approximately 85,000 crypto traders with active market positions according to Coinglass data. It was noted that long traders suffered the most, incurring losses of around $136 million while short traders experienced losses near $30 million.

Bitcoin's price downfall was preceded by an increase in Ordinals inscriptions, resulting in a significant increase in the average transaction fee that exceeded $37, as reported in BitInfoCharts data. The surge in Ordinals inscriptions led to over 288,000 unconfirmed transactions, clogging the Bitcoin network, highlighting an unusual spike in transaction fees and blockchain congestion.

In parallel, despite the bearish sentiment, Bitcoin’s dominance in the Non-Fungible Token (NFT) markets is expanding, generating impressive sales of $677 million in the last 30 days, surpassing Ethereum. The ability to integrate Bitcoin with NFT features like Ordinals and SATS, RAT, and MICE markers exemplifies Bitcoin's robust performance and growth potential in the NFT market.

However, according to VanECK's CEO, Jan Van Eck, Bitcoin remains a powerful contender and is likely to hit its all-time high again in the next 12 months. Bitcoin's robust macro fundamentals and the upcoming Bitcoin Halving event are likely to contribute to its performance in the coming year.