Weekly Bitcoin Rates Drop to 8-Month Low: ITB

Transaction fees on the Bitcoin network have continued to decline months after their most recent peak during the halving event.

Data from IntoTheBlock shows that the leading crypto network’s fees have declined by 18% this week after falling 27% from the previous week. The continued decline has placed Bitcoin rates at their lowest level since November 2023.

Bitcoin rates are declining

Three months ago, Bitcoin recorded the highest transaction fees among all protocols, including Ethereum. For a few days before the latest Bitcoin halving event, the network’s fees consecutively outperformed all others as activity increased.

One of the main drivers of the increase in transaction fees at that time was the launch of the Runes protocol, which finally took place in the middle of the day. Runes enable the issuance and transfer of fungible tokens on the network and the combination of this new development with the already existing Ordinals protocol, which introduced non-fungible Bitcoin tokens, increased activity and in turn the rates

However, transaction fees fell a few days after the halving, falling to 35% of Bitcoin miners’ earnings from the 75% recorded before the event. On the day of the halving, Bitcoin daily fees rose to a new all-time high of $80 million, but at the time of writing, the network was recording less than $6 million per week.

Data from mempool.space showed that the average cost of a Bitcoin transaction is about 5 sats/vByte worth $0.0029, a far cry from the 90 sats/vByte ($8.50) recorded in mid April Additionally, information on YCharts reveals that Bitcoin accrues less than $1 million in daily transaction fees. In fact, the last time the network recorded $1 million in transaction fees was on July 3; on July 11, the fees totaled $721,599.

BTC Ready For A Rally?

The drop in Bitcoin transaction fees can be attributed to a number of factors, primarily the decrease in network activity, which correlates somewhat with the drop in the frontier market. Bitcoin has experienced a significant decline in value in recent weeks, so much so that its price dropped to a level not seen since late February.

Given that the main propeller of the fall, the oversupply from the German authorities will be reduced soon, bitcoin may be ready for a rally soon. It remains to be seen whether the network’s transaction fees will follow suit.

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