The cryptocurrency market has seen significant fluctuations recently, with the world’s largest cryptocurrency, Bitcoin (BTC), facing strong selling pressure as gas fees soar. Though BTC currently trades at $27,558 with a market cap of $533 billion, retail investors have continued accumulating the digital asset.
Data from Glassnode reveals that Bitcoin shrimp, or holders with less than 1 BTC, are consuming the entire new supply produced each month. This retail accumulation could be seen as a positive sign, hinting at persistent faith in the cryptocurrency’s future despite the ongoing selling pressure.
On the other hand, Bitcoin whales who have accumulated the digital asset since the start of 2022 have also been offloading their supply. This comes after BTC gained more than 75% since the beginning of the year, raising concerns that short-term profit-taking could be affecting the market’s sentiment.
A possible factor contributing to the heightened gas fees is the overwhelming activity recently seen from Bitcoin Ordinals, also known as Bitcoin NFTs. These non-fungible tokens have led to a surge in Bitcoin network fees and thousands of unconfirmed transactions. Yet, on-chain data shows that the total number of unconfirmed transactions has dropped below 400,000 from nearly 500,000 over the weekend.
The Bitcoin network’s BRC20 tokens, the standard developed by Twitter user Domo on March 8, have also attracted attention with a market cap exceeding $1 billion and 24-hour trading volumes of over $200 million. Prominent BRC20 tokens such as ORDI, NALS, VMPX, PEPE, and MEME, which operate only with wallets supporting the Bitcoin blockchain, have experienced wide price fluctuations ranging from +10% to -55%.
Amid growing demand for Bitcoin Ordinals, top exchanges like Binance and Gemini have rushed to offer support. However, this frenzy of activity also raises concerns regarding the potential impact on the Bitcoin network, leading some market participants to question the sustainability of the current dynamics.
In conclusion, the cryptocurrency market is experiencing a tug-of-war between enthusiastic retail accumulation and whale offloading. With Bitcoin Ordinals driving gas fees higher and the market cap of BRC20 tokens surpassing $1 billion, the market’s future direction remains shrouded in uncertainty. As always, conducting thorough research before investing in cryptocurrencies is critical for navigating these volatile waters.
Source: Coingape
