The selling pressure on Bitcoin (BTC) has increased recently as a result of soaring gas fees, which have reached a two-year high. This has even led popular exchanges such as Binance to temporarily suspend withdrawals. The rise in gas fees has not shown any signs of slowing down as it currently costs an average of $30.91 per transaction, and many analysts predict it will break all-time highs in the near term.
This recent spike in gas fees is primarily attributed to the strong demand for Bitcoin Ordinals, or Bitcoin NFTs, which has led to a significant boost in revenue for miners. The average fee paid per block has now reached 2.905 BTC, nearing previous bull peaks. Though there’s a chance of a bounceback as shorts on BitMEX have surged to a two-month high, according to on-chain data provider Santiment. Historically, the probability of price increases has risen when crowd sentiment assumes prices will drop.
At the time of writing, Bitcoin is trading at $27,668, with a market cap of $535 billion. The $27,000 support level is crucial as, if it fails to hold, the next immediate support level for Bitcoin will be at $24,000.
Despite the aforementioned issues, it’s essential to note that the future Bitcoin price trajectory will also be influenced by key macroeconomic factors. For example, during an FOMC event on May 9, vice chair John Williams stated that the Federal Reserve has not committed to ending rate hikes, and further decisions would be based on the economic data available. This indicates that not only technical factors such as gas fees and exchange halts but also broader economic indicators will play a critical part in determining Bitcoin’s future price movements.
In conclusion, the current surge in gas fees, market sentiment, and key macroeconomic factors will all influence the upcoming shift in Bitcoin’s price trajectory. Given the significance of the $27,000 support level, both pessimism and optimism surround the next potential moves in the cryptocurrency space. While some believe that the support level will hold, paving the way for further price increases, others argue that a failure to hold this support level will result in a decline to $24,000. As always, investors and enthusiasts should do thorough research and keep a close eye on developments to make informed decisions when it comes to investing in cryptocurrencies.