On Tuesday morning in Asia, Bitcoin fell below US$28,000 as the growth of the Ordinal protocol and Bitcoin-based memecoins drove up transaction fees and caused network congestion. Ether, as well as the top ten non-stablecoin cryptocurrencies, have declined, with Litecoin topping the losers. After Wall Street closed neutral on Monday, US equity futures traded flat to lower ahead of the latest inflation report for the economy on Wednesday.
According to CoinMarketCap data, Bitcoin fell 3.48% to US$27,594 in the 24 hours to 09:00 a.m. in Hong Kong. Over the last seven days, the token has dropped 1.76%. Binance, the world’s largest cryptocurrency exchange, suspended Bitcoin withdrawals twice in 12 hours on Sunday and Monday, claiming congestion and increased transaction fees. According to data from the financial information portal YCharts, the average transaction fee on the Bitcoin blockchain increased to US$19.21 on Sunday, over seven times higher than at the beginning of the month.
The Ordinal protocol, which was developed in January and allows users to manufacture memecoins and digital collectibles on the Bitcoin network, is responsible for the increase in transactions. Ether declined 2.04% to $1,843 but gained 0.50% on the week. The second-largest cryptocurrency fell to a low of $1,818 on Tuesday but managed to hold the $1,800 resistance level.
The top ten non-stablecoin cryptocurrencies have all traded lower in the last 24 hours, with Litecoin leading the losses, falling 8.08% to US$77.65 and registering a weekly loss of 10.59%. Pepe and Floki, two memecoins that skyrocketed after being published on Binance last week, have dropped 32.88% and 12.36% in the last 24 hours, respectively.
Bittrex Inc., a Seattle-based cryptocurrency exchange, filed for Chapter 11 bankruptcy on Monday, adding to the gloom. The company ceased operations in the United States on April 30 and is being investigated by the Securities and Exchange Commission for possible securities law breaches. The charges have been dismissed by the corporation. Bittrex Global stated on Tuesday that it will continue to serve consumers outside the United States.
In the last 24 hours, the overall crypto market capitalization fell 3.26% to $1.14 trillion. Total trading volume increased by 56.84% to US$45.38 billion.
The Forkast 500 NFT index decreased 2.11% to 3,371.82 in the 24 hours to 09:00 a.m. in Hong Kong, down 7.27% for the week. DeGods, the largest Solana-based NFT collection by all-time sales before migrating to the Ethereum blockchain in April 2023, saw its sales increase 400% in the last 24 hours to US$1.19 million, surpassing Azuki and Bored Ape Yacht Club.
According to data from blockchain intelligence platform BitInfoCharts, sales on the Ethereum blockchain fell 3.75% to US$15.42 million, with the average transaction cost on the Ethereum blockchain reaching US$21.40 on May 8, the highest in 11 months.
“The Ethereum network is extremely congested.” “Gas fees are through the roof due to memecoin season,” stated Brian Boisjoli, Product Manager at Forkast Labs, noting that with nearly 200,000 pending ethereum transactions, completing a transaction on the network would take roughly 4 hours.
As of 9:00 a.m. in Hong Kong, US stock futures were slightly lower. Futures on the Dow Jones Industrial Average fell 0.09%. The S&P 500 futures fell 0.10%. The Nasdaq Composite futures fell 0.17%.
In its financial stability report issued on Monday, the Federal Reserve cited banking system turmoil as a threat to the economy, saying that “concerns about the economic outlook, credit quality, and funding liquidity could lead banks and other financial institutions to further contract the supply of credit to the economy.”
The April consumer price index report for the United States is due out on Wednesday, with experts anticipating inflation to jump 5% year on year and 0.4% month on month, according to CNBC on Monday, citing Dow Jones estimates.
The Fed will meet again on June 14 to discuss interest rates. The CME FedWatch Tool anticipates that rates will remain constant at 5% to 5.25%, with a 14.3% possibility of another 25 basis-point rate hike, up from 9.6% on Monday.