Bitcoin Falls Below USD 28,000, Ether Falls, Litecoin Falls Further, US Stock Futures Halt
Bitcoin fell below $28,000 on Tuesday morning in Asia as the rise of the Ordinal protocol and Bitcoin-based memecoins increased transaction fees and caused network congestion. Ether and all other top 10 non-stablecoin cryptocurrencies also fell back, with Litecoin leading the losers. U.S. stock futures traded flat to lower after Wall Street closed mixed on Monday ahead of the latest inflation reading for the economy on Wednesday.
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Top 10 Cryptos Losing Steam
Bitcoin fell 3.48% to US$27,594 in the 24 hours to 09:00 a.m. in Hong Kong, according to CoinMarketCap data. The token has fallen 1.76% in the last seven days.
Binance, the world’s largest crypto exchange, halted Bitcoin withdrawals twice within 12 hours on Sunday and Monday, citing congestion and higher transaction fees. The average transaction fee on the Bitcoin blockchain rose to $19.21 on Sunday, nearly seven times higher than at the beginning of the month, according to data from financial information platform YCharts.
The jump in transactions is attributed to the Ordinal protocol introduced in January that allows users to mint memecoins and digital collectibles on the Bitcoin blockchain.
Ether fell 2.04% to $1,843, but had a weekly gain of 0.50%. The second-largest cryptocurrency touched a low of $1,818 earlier on Tuesday, but managed to hold the $1,800 resistance level.
All other top 10 non-stablecoin cryptocurrencies traded lower in the last 24 hours, with Litecoin leading the losers, which fell 8.08% to USD 77.65 and recorded a weekly loss of 10.59%.
Pepe and Floki, two memecoins that surged after being listed on Binance last week, fell 32.88% and 12.36% in the last 24 hours.
Adding to the pessimism, Seattle-based crypto exchange Bittrex Inc. filed for chapter 11 bankruptcy on Monday. The company closed its US operations on April 30 and is facing charges from the Securities and Exchange Commission for alleged violations of securities laws. The company has denied the allegations. Bittrex Global will continue to serve customers outside the US, the company said on Tuesday.
The total crypto market cap fell 3.26% in the last 24 hours to $1.14 trillion. Total trading volume jumped 56.84% to $45.38 billion.
NFT trades fall amid memecoin hype
The indices are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.
In the non-fungible token (NFT) market, the Forkast 500 NFT index fell 2.11% to 3,371.82 in the 24 hours to 09:00 in Hong Kong, losing 7.27% for the week.
DeGods, previously the largest Solana-based NFT collection of all time that migrated to the Ethereum blockchain in April 2023, saw sales in the last 24 hours increase by over 400% to $1.19 million, surpassing the sales of Azuki and Bored Ape Yacht Club.
Ethereum blockchain sales fell 3.75% to US$15.42 million, with the average Ethereum blockchain transaction fee reaching US$21.40 on May 8, the highest in 11 months, according to data from blockchain intelligence platform BitInfoCharts .
“The Ethereum network is heavily congested. Gas fees are through the roof due to memecoin season,” said Brian Boisjoli, Product Manager at Forkast Labs, who noted that with nearly 200,000 pending Ethereum transactions, it would take around 4 hours to complete a transaction on the network.
US stock futures flat ahead of CPI
US stock futures were down at 09:00 in Hong Kong. Dow Jones Industrial Average futures lost 0.09%. S&P 500 futures fell 0.10 percent. And Nasdaq Composite futures fell 0.17%.
The Federal Reserve highlighted turmoil in the banking system as a threat to the economy in its Financial Stability Report on Monday, saying “concerns about the economic outlook, credit quality and funding liquidity may cause banks and other financial institutions to further tighten the supply of credit to the economy.”
The US consumer price index for April is released on Wednesday, with economists expecting the inflation rate to rise 5% on the year and 0.4% on the month, according to CNBC on Monday, citing estimates from Dow Jones.
The Fed next meets on June 14 to decide interest rates. The CME FedWatch Tool predicts an 85.7% chance the Fed will keep rates unchanged at 5% to 5.25%, while giving a 14.3% chance of another 25 basis point rate hike, up from 9.6% on Monday.
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