Bitcoin (BTC) price is currently down due to continuous “congestion” frustrating traders and putting pressure on the market sentiment.
Binance “FUD” drags Bitcoin down
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin is trading below $28,000 as Wall Street opens on May 8.
The largest cryptocurrency is experiencing a dip in sentiment due to transaction fees reaching their highest levels ever and the mempool becoming almost 98% full.
BREAKING:
Due to the emergence of #Ordinals (Bitcoin NFTs), over 450,000+ transactions are now stuck/pending on the #Bitcoin blockchain, as fees have surged to new highs.
It now cost on average $19.21 per $BTC transaction, but many exchanges are charging $60+ to process them. pic.twitter.com/aTI7ccXlrH
— WhaleWire (@WhaleWire) May 8, 2023
Market participants believe that mass transactions “spamming” the Bitcoin network are at the root of the problem. However, the situation has been exacerbated by the largest global exchange, Binance, repeatedly halting BTC withdrawals.
Binance attributed the outages to “congestion”, creating a backlog of withdrawals, which worsened the already nervous market sentiment. A subsequent tweet confirmed that the backlog had been cleared.
All pending $BTC withdrawal transactions have now been processed.
Once again, thank you for your patience and our team is already implementing solutions to make sure this doesn’t happen again. https://t.co/tY7S8R3U9d
— Binance (@binance) May 8, 2023
Despite this, BTC/USD has remained low, with the day’s lows standing at $27,617 at the time of writing, representing a drop of 7.4% compared to the local highs seen over the weekend.
Binance Coin (BNB), the exchange’s in-house token, has also experienced losses of around 2.4%, currently trading at approximately $315.
Traders, whether supportive or not, have quickly agreed with Binance CEO Changpeng Zhao when he referred to the market reaction to the withdrawal pauses as “FUD”.
Binance closed Bitcoin withdrawals and users immediately panic sold #Bitcoin and bought Tethers at a premium.
Pro tip: Don’t buy Tethers at a premium because you’re afraid of getting rugged by CZ. Withdraw your coins to cold storage to verify that you aren’t holding paper… pic.twitter.com/2e6feI3CTM
— Stack Hodler (@stackhodler) May 8, 2023
Amid an extended downtrend, Bitcoin traders are starting to look for potential targets for a long entry.
The founder and CEO of trading firm Eight, Michaël van de Poppe, set his sights on $27,400 and $26,800, respectively.
Van de Poppe noted that the difference in weekend opening and closing prices had created a “gap” in the Bitcoin futures markets at CME Group, implying that there may now be an uptick to “fill it” in classic style.
Popular trader CrypNuevo, on the other hand, is eyeing targets closer to spot.
Nice move during the Asian session towards the wick. pic.twitter.com/YKfKGICwhX
— CrypNuevo (@CrypNuevo) May 8, 2023
Meanwhile, Daan Crypto Trades says there’s a “no trade zone on BTC” until there’s a proper break or sweep of either range extreme.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
