Bitcoin Fees Slipped, Miners Return While Price Rallies
The price of a single BTC coin is USD 15,500, as of 10:26 UTC Friday morning. It has gone up more than 7% in a day and more than 17% in a week. Furthermore, it appreciated 45% in the last month and 66% in a year. Moreover, BTC 24-hour trading volume on exchanges hit almost USD 32.8bn today, while on Wednesday it still was below USD 20b.
Meanwhile, following a substantial, previously-noted drop in hashrate, which was presumably a result of Chinese miners relocating equipment for the dry season, the computational power of the network has went further down 3.3% in the last 24 hours to the current 124.501 EH/s, per BitInfoChart.com. But looking at the 7-day simple moving average, the charts show hashrate climbing 6.4% since November 2 to 115.155 EH/s.
This also comes as the second-largest drop in bitcoin mining difficulty, the measure that shows how hard it is to compete for mining rewards, was recorded in the last difficulty adjustment three days ago.
The mining difficulty of Bitcoin is adjusted every two weeks (or precisely every 2016 blocks) to maintain the normal 10-minute block time. BitInfoCharts currently shows this average time between blocks to be 9.28 minutes – significanlty less than 15 minutes recorded four days ago.
The difficulty drop was a much-awaited relief, given the skyrocketing fees recently seen on the Bitcoin network, in combination with the mentioned drop in hashrate and crowded mempools. But there seems to be a relief on the fees front too, as they are at the moment slightly down. The average transaction fee (7-day simple moving average) is down 3.4% in three days to USD 11.5, which is still a far cry from USD 2.18 seen in mid-October. The median transaction fee is also down, 9.2% in three days.
As said, it’s not the first time bitcoin went as high as it did, but Binance Research argued in an emailed market commentary that what’s surprising this time around is that “on-chain fundamentals seemed initially weaker than a few weeks ago.” The difficulty went lower, and so did hashrate.
“However, transaction fees collected by miners have increased sharply over the past few days, with an average fee on Bitcoin above [USD] 12 for the first time since January 2018. While transaction costs are paid in BTC, it is natural for on-chain transaction costs to move in line with BTC’s price when denominated in USD. Yet, transaction fees recently went up at a faster rate than the USD price of BTC,” they added.
And as for the above-mentioned, previously much-crowded mempool – with people earlier reporting days of waiting for their transactions to be confirmed – it too has cleared somewhat, even if it remains elevated. The last four days have seen a significant amount of unconfirmed transactions with the lowest fees – tens of thousands of them – as well as several thousand higher fee transactions. These numbers are lower than those seen in the last two weeks.
At the same time, fees on the Ethereum (ETH) network that have been skyrocketing in their right earlier this year, have continued the drop started in late September. Average transaction fee (7-day simple moving average) is down 78.1% since September 23 to USD 1.2. However, waw values show it rising 30% since yesterday to USD 1.77.