Bitcoin prices have fallen by 4.2% over the past weekend, once again falling to $28000
Bitcoin prices have fallen by 4.2% over the past weekend, once again falling to $28000. The broader cryptocurrency market has also been in a loss making state. Ethereum, the second largest cryptocurrency by market value, has fallen by 6% since last Friday.
Why did Bitcoin and cryptocurrencies decline today?
As always, the recent price trend of Bitcoin should be viewed from multiple perspectives, as in most cases, there is more than one reason. However, there is currently a prominent factor: the congestion of Bitcoin networks and the extremely high cost of BTC transactions.
The reason for congestion is the Bitcoin serial number and the new BRC-20 token standard. With the creation in early March, people can now create alternative tokens other than Bitcoin. This new token standard is supported by the meme coin community, with a rapid increase in daily trading volume and a market value of over $160 million this week.
Binance is the cryptocurrency exchange with the largest trading volume and announced on Sunday for the first time that it has stopped withdrawing Bitcoin (BTC) funds. According to a statement on Twitter, the exchange has stopped withdrawing Bitcoin (BTC) due to network congestion.
A few hours ago, Binance stopped withdrawing from Bitcoin again, citing a large backlog of pending withdrawals. Binance tweeted on May 8th stating that it has "temporarily" closed BTC withdrawals due to the existence of "a large number of pending transactions".
Two hours later, Binance wrote that BTC withdrawals were available again, but at a higher cost. The exchange explained, "In order to prevent similar situations from happening again in the future, we have adjusted the fees," and added, "We will continue to monitor on chain activities and make corresponding adjustments as needed. Our team has also been committed to enabling BTC Lightning network withdrawals, which will provide assistance in this situation
The blockage of the Bitcoin network and the suspension of Binance's withdrawals may have disrupted the market and led to a decline in prices. It is worth noting that it is not just about Coin An. As of the time of publication, there are 429000 transactions waiting to be included in a block in the meme pool.
On the other hand, it should be pointed out that after a strong rebound at the beginning of the year, Bitcoin prices are now in a consolidation phase for several weeks. With the recent price decline, BTC has fallen into a trading range, but the overall bullish outlook for BTC has not changed.
Last but not least, as reported by Bitcoinist, the Bitcoin and cryptocurrency markets are currently struggling to cope with historically low liquidity due to the Blockpoint 2.0 initiative. Therefore, it is expected that volatility will be higher, as even some large buying and selling orders will have a greater impact on the market.
Delta based trader @ Skew52 explained that during the period of sharp price declines, it is worth noting that Coinbase led the market downward with spot sales. Due to BTC stabilizing at $28200 at the time of publication, the trader wrote:
BTC Coin On Spot. Update: The spot buyer is approximately $28000 and may sell for approximately $28.5K - $28.7K. The bidding depth here is still good.
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