Anxiety forces over 55K Bitcoin traders into liquidation amid high transaction fees

Article Summary

• Over 55,000 traders were liquidated due to high transaction fees and a backlog of transactions affecting the Bitcoin network.
• The temporary suspension of Bitcoin withdrawals on Binance was due to congestion issues affecting Bitcoin’s network, leading to speculation on Crypto Twitter about the cause of the outage.
• The growing popularity of NFTs is causing congestion issues on the Bitcoin network, with some in the Bitcoin community condemning their impact.

Over 55,000 traders were forced into liquidation as anxiety around Bitcoin increased due to high transaction fees and a backlog of transactions.

Bitcoin’s trading range was tested, with the cryptocurrency down 2% at $28.2K and Ether down 1.6% at $1,869. The lack of tools to break through the $30,000 barrier or fall towards important trend lines near $25K disappointed market participants. In the last 24 hours, 55,335 trades have been liquidated, totalling $131.81 million.

The effects of high transaction fees

The high transaction fees and congestion issues affecting Bitcoin’s network led to the temporary suspension of Bitcoin withdrawals on Binance. Over 469,000 transactions are currently pending confirmation in Bitcoin’s mempool, with high-priority transactions charging 654 sat/vB, or about $26.

Two indicators suggested that Bitcoin’s network was particularly congested, leading to speculation on Crypto Twitter about the cause of the outage. Binance reported that Bitcoin withdrawals resumed after an hour, while cryptocurrency exchange OKX said its Bitcoin deposit and withdrawal services were working well despite the high transaction costs.

What you should know

The Federal Reserve’s announcement of its 10th straight interest rate hike since March 2022 dampened crypto growth this week, with many major cryptocurrencies trading at or slightly below prices from last week.

Additionally, some of the largest miners have either filed for bankruptcy, received relief, or restructured their debt, all remnants of a brutal and bearish 2022.

Meanwhile, the Bitcoin community is divided on the growing popularity of NFTs and their impact on the state of the Bitcoin network. NFT-like Ordinal Inscriptions, which are digital assets written in Satoshis and enabled by Taproot upgrades and smart contracts, are causing congestion issues on the network.

Conspiracy theories on Crypto Twitter also emerged, with some suggesting a “cryptocurrency war” linked to the recent collapses of Silicon Valley Bank, Silvergate, and Signature. Robert F. Kennedy Jr., a 2024 Democratic presidential candidate, believes in this theory and seems to be positioning himself as a “crypto people’s man.”