Bitcoin Transaction Fees Reach Lowest Since 2011

Acryptoinvest.news: Bitcoin transaction fees have fallen to their lowest in over a decade as public sentiment over a Federal Reserve rate cut reaches a fever pitch, casting doubt on the market's sustainability.

According to Glassnode, daily transaction fees on the Bitcoin network (14-day simple moving average) recently fell to 3.5 BTC, the lowest level since late 2011.

The main factor behind the recent market strength was Federal Reserve Chairman Jerome Powell's speech in Jackson Hole, where he hinted at a possible rate cut, saying that “the changing balance of risks may require a policy adjustment.”

Social sentiment reaches dangerous territory for bulls

Social media saw a sharp increase in mentions of keywords such as “Fed,” “rate,” and “cut,” with data from Santiment showing the largest increase in 11 months.

This massive surge of discussion around one optimistic narrative historically means that the euphoria may be getting too strong.

When public sentiment around a particular catalyst reaches extremes, it often coincides with local price peaks.

Glassnode analysis raises concerns among Bitcoin holders. The dense supply cluster, which has accumulated since early July and amounts to between $113,000 and $120,000, is owned by investors who have held Bitcoin for less than three months.

The SOPR by age metric for these short-term holders currently ranges from 0.96 to 1.01, indicating a slight decline in recognition.

Exchange Inflows Paint a Worrying Picture for Bitcoin

One worrying trend is the growing supply of Bitcoin on exchanges. Since the beginning of June, the volume of BTC on exchanges has increased by almost 70,000 coins.

This reverses the long-term trend of coins moving into cold storage and suggests that more holders are preparing to sell.

Historically, rising exchange balances have preceded selling pressure as investors move coins to platforms in preparation for liquidation.

Bitcoin network health indicators are showing a neutral to cautious picture, with the number of daily active addresses and transaction volumes declining from recent highs.

The long-term MVRV ratio is 18.5%, which is a bit of a risky area for new investments.

Source: cryptonews.net