Why Is Bitcoin Down Today? Crypto Market Takes Another Hit

1 year ago

The Bitcoin terms mislaid 4.2% implicit the past play and slid again to $28,000. The broader crypto marketplace is besides consistently successful the red. The 2nd largest cryptocurrency by marketplace cap, Ethereum, is down 6% since Friday.

Why Are Bitcoin And Crypto Down Today?

As always, Bitcoin’s caller terms question should beryllium viewed from aggregate angles, arsenic for astir of the clip determination is not conscionable 1 reason. However, 1 origin stands retired astatine the moment: the congestion of the Bitcoin web and the highly precocious fees for a BTC transaction.

The reasons for the congestion are the Bitcoin Ordinals and the caller BRC-20 token standard. With its instauration successful aboriginal March, radical tin present make fungible tokens successful summation to Bitcoin. Embraced by the meme coin community, this caller token modular has rapidly seen a surge successful regular transactions and a marketplace headdress of implicit $160 cardinal this week.

Binance, the largest cryptocurrency speech by trading volume, archetypal announced connected Sunday that it had halted Bitcoin (BTC) withdrawals. According to a connection connected Twitter, the speech has stopped Bitcoin (BTC) withdrawals owed to congestion connected the Bitcoin network.

A fewer hours ago, Binance halted Bitcoin withdrawals again, citing a ample backlog of pending withdrawals. Binance tweeted connected May 8 that it had “temporarily” unopen down BTC withdrawals due to the fact that determination was “a ample measurement of pending transactions.”

We've temporarily closed #BTC withdrawals owed to the ample measurement of pending transactions.

Our squad is presently moving connected a hole and volition reopen $BTC withdrawals arsenic soon arsenic possible.

Rest assured, funds are SAFU.

— Binance (@binance) May 8, 2023

After 2 hours, Binance wrote that BTC withdrawals were disposable again, but astatine higher fees. “To forestall a akin recurrence successful the future, our fees person been adjusted,” the speech explained, adding, “We volition proceed to show on-chain enactment and set accordingly if needed. Our squad has besides been moving connected enabling BTC Lightning Network withdrawals, which volition assistance successful specified situations.”

The clogging of the Bitcoin network, arsenic good arsenic the withdrawal intermission astatine Binance, whitethorn person unsettled the marketplace and caused the terms drop. Remarkably, it’s not conscionable Binance. At property time, 429,000 transactions were waiting successful the meme pool to beryllium included successful a block.

On the different hand, it should beryllium noted that the Bitcoin terms has been successful a consolidation signifier for respective weeks present aft the furious rally astatine the opening of the year. With the caller terms drop, BTC is stuck successful its trading range, but the wide bullish representation for BTC remains unchanged.

Last but not least, the Bitcoin and crypto marketplace is presently struggling with historically debased liquidity arsenic a effect of Operation Choke Point 2.0, arsenic Bitcoinist reported. Due to this, volatility is expected to beryllium higher arsenic adjacent a fewer ample bargain and merchantability orders tin determination the marketplace more.

Delta-based trader @Skew52 explained that during the terms slump, it was noticeable that Coinbase led the marketplace with spot income to the downside. As BTC stabilized astatine $28,200 astatine property time, the trader wrote:

$BTC Binance Spot. Update: spot buyers astir $28K & apt to merchantability astir $28.5K – $28.7K Still decent bid extent here.