The world’s largest cryptocurrency, Bitcoin (BTC), is facing strong selling pressure and speculation of a major correction on the horizon. Over just 48 hours, many events occurred within the Bitcoin ecosystem. BTC gas fees skyrocketed to new highs, crypto exchange Binance paused withdrawals twice, and Bitcoin Ordinals with the BRC20 standard were rumored to drive gas fees higher. Bitcoin’s price dropped another 2%, slipping below $28,000 and trading at $27,652 at the time of writing, with a market cap of $535 billion.
However, this surge in gas fees benefits Bitcoin miners. Despite these gains, investors should be cautious of potential red flags. WhaleWire, a popular crypto handle, points out that Bitcoin transaction fees surged to their third-highest level in history. The last two peaks led to price corrections of over 80%. On the technical chart, Bitcoin formed a classic head and shoulders pattern, indicating that its price could drop to $24,000.
While transaction activity on the Bitcoin blockchain spiked in recent days, the total number of active addresses fell notably. Both new and active addresses are at their lowest levels in quite some time. However, on the positive side, the BTC supply at exchanges is at its lowest since 2017. This could mean reduced selling pressure, as a drop in exchange supply suggests investors are moving their BTC into cold custody for long-term holding, leading to decreased risk of selling back to exchanges.
At the same time, Bitcoin whale activity is growing. On-chain data provider Glassnode explains that one of Bitcoin’s largest whale addresses, a Binance cold wallet, has moved a significant amount of BTC out of its possession. As a result, Bitcoin’s supply on exchanges has dropped from 6.78% to 5.84%. While there are both advantages and disadvantages to the current market trends, it is crucial to do thorough research and remain vigilant in understanding and navigating the volatile cryptocurrency landscape.
Source: Coingape
