Bitcoin (BTC) has experienced some selling pressure lately, trading below $37,000 amidst whale sell-offs. As the price drops, transaction fees on the Bitcoin network continue to rise significantly.
Experienced cryptocurrency analyst Will Clemente reported that Bitcoin network transaction fees have reached their highest level since the hype in May this year. The analyst emphasizes that there is no reason to complain about high transaction fees in Bitcoin, highlighting that high fees may not always be the most optimal. He also added that as a Bitcoin investor, high transaction fees contribute to the increase in mining incentives and ultimately support the security of the network.
As of November 12th, the total number of Bitcoin transactions primarily minted with BRC-20 reached a record-breaking 505,000. With this significant milestone, the total number of Bitcoin transactions surpassed 40 million. In particular, Atomic paid an impressive transaction fee of 2.63 BTC with more than 28,000 mintings on the same day. This was the second highest transaction fee payment since the protocol’s inception on September 23rd.
Furthermore, Clemente noted that the notable positive trend in the market structure comes from the consistent decline in the percentage of Bitcoin futures contracts collateralized with BTC over the past three years, which has decreased from 70% to 25%.
When holding a long position with BTC as collateral, the collateral value decreases synchronously with profit and loss (PnL), increasing the risk of liquidation in a market downturn. However, with futures contracts now predominantly collateralized in US dollars, downward movements in the market are less likely to result in liquidation. While this change does not completely eliminate the possibility, it reduces the likelihood of large-scale liquidations.
Cryptocurrency analyst Faibik set a $50,000 target for Bitcoin after conducting a comprehensive evaluation of its price trajectory. According to the analyst’s analysis, if BTC remains within a range of $34,000 to $38,000 for the next two months, it could see a new rally by mid-February 2024 and potentially reach $50,000 by the end of March 2024.