Bitcoin network transactions and fees rise amid reduced investor risk

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The number of transactions on the Bitcoin network has increased over the past week, which blockchain analytics firm Glassnode suggests are “urgent” transactions due to reduced investor risk.

A sudden influx of 42,800 transactions hit the Bitcoin (BTC) mempool last week. Glassnode’s chief analyst says these were likely “rush” transactions due to the high amount of fees paid per transaction. The average fee rose to $2.72 last week, about 15% higher than the usual average according to bitinfocharts, an on-chain data tracker. The findings were reported in Glassnode’s “Week On-chain” report on May 9.

The mempool on a blockchain network is where transactions are sent before being confirmed in a block. The higher the fees paid on a transaction, the higher the probability that it will be chosen before the others.

Glassnode wrote that investors were paying higher than average fees, likely in order to prioritize their offerings to reduce portfolio risk or add collateral to their margin positions, as the price of BTC fell 19% over the course of the year. of the last seven days. Just over 15% of fees paid for on-chain transactions correlated to exchange deposit rates, and these were only higher in May 2021 during another period of strong sales.

BTC inflows to exchanges exceeded inflows for most of 2022, but that changed last week as there were over $50 million more inflows than outflows. Glassnode said the full amount of trade-related volume was only exceeded last October and November and was consistent with the peak of the 2017 bull market in late December and early January 2018.

Glassnode also noted that BTC accumulation has been on a low trend since mid-April. The “shrimps” who hold less than a whole bitcoin were the biggest accumulators of any cohort of wallets down to the whales over the past week, but even their accumulated strength was weak compared to previous months this year.

The largest distributors, or sellers, were those in the highest cohort who held at least 10,000 coins. According to Glassnode, distribution has been greater than accumulation for most of 2022, however, the largest accumulators have been those holding less than one BTC all the way up to those holding 10.

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With total fees spent locally elevated as investors urgently attempt to exit more volatile positions, it looks like Bitcoin markets could continue on their “rocky path” towards capitulation, as Cointelegraph reported. May 10.

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