Prominent analytics firm IntoTheBlock says high transaction fees on both Bitcoin and Ethereum are starting to subside again as the hype around the digital assets begins to lose momentum. New data from IntoTheBlock reveals that transaction fees on Bitcoin fell by 32 percent this week and those on Ethereum by 24.4 percent this week.
The big question is, of course, what that means for the assets.
Difficult period
The bottom line is that both Bitcoin and Ethereum are currently going through a difficult period. We’ve had a fantastic start to the year 2023, but it’s now a bit of a mess. The bulls are starting to lose momentum to the bears and macroeconomic conditions appear to be weighing on sentiment as well.
Of course, it is possible that Bitcoin needs to catch its breath for a while and that it could continue the gains afterwards. But at the moment, the macroeconomic picture seems to be really weighing on the market.
In just 14 months, the US central bank raised interest rates from practically zero to five percent. It is inevitable that we have yet to feel the full impact of those rate hikes.
The economy ran for 10 years at an interest rate of practically zero percent and now suddenly has to make do with much higher financing costs. That can’t go well for long and we now seem to notice that with both Bitcoin and Ethereum.
Whales wake up
While prices are struggling right now, the whales don’t seem to mind when it comes to Ethereum. Compared to the beginning of 2023, whales are already holding 3.5 million more Ethereum.
“The number of Ethereum whales is rising! They now hold 30.07 million ETH, while earlier this year that number was 26.56 million ETH in 2023,” said IntoTheBlock.
According to the analytics firm, this sharp increase in the number of Ethereum held by whales is a sign that this cohort is currently accumulating. That is, they hope to benefit from the falling prices.
As far as Bitcoin is concerned, it mainly reports that the correlation with equities is decreasing or that there is even a negative correlation. At the moment, equities are doing quite well, while Bitcoin is unstoppable.