Downside volatility is greeting traders thanks to a full mempool, and the explanations point the finger at multiple parties.
The largest exchange, Binance, adds to the confusion, pausing BTC withdrawals multiple times for what it calls network “congestion.”
Amid the turmoil, BTC/USD is showing signs of stress, breaking from $28,000 to threaten a breakout of its wider trading range.
The events mark a nervous start to a week filled with potential BTC price volatility catalysts. These come in the form of macroeconomic data releases, including the consumer price index and first-quarter earnings reports.
As Bitcoin network metrics show the impact of current network activity, the data shows that miners are still selling their assets, leading analysts to conclude that the 2022 bear market is still in play.
Cointelegraph breaks down these factors and more in the weekly roundup of what’s moving crypto markets.
Binance CEO Calls Out “FUD” Amid BTC Withdrawal Holds
Bitcoin is under pressure at the start of the week, but not for the usual reasons.
As BTC/USD falls to $28,000, observers are closely watching events on-chain and on the largest global exchange Binance.
The latter halted BTC withdrawals three times since the weekend, citing “congestion” on the Bitcoin network, while simultaneously moving large amounts of funds between wallets.
Binance’s moves came as large numbers of transactions entered the Bitcoin mempool, pushing already high fees further into territory not seen in several years.
That had the unintended result of creating the first Bitcoin block in which miners earned more from the fees than the block subsidy itself: 6.75 BTC vs. 6.25 BTC, respectively.
The focus was on Ordinals and even crypto investment giant Digital Currency Group as the source of the transactions. Later, market participants, including researcher and investor Eric Wall, revealed a potential source of the on-chain “spam.”
Meanwhile, Binance received criticism from some of the biggest names in the industry for its policy.
“Bitcoin is not experiencing congestion. It is experiencing high demand,” argued core developer Peter Todd.
“binance can simply allow users to specify what fee they are willing to pay to withdraw and pay that fee. It costs ~$5 to get an exit on the next block. nbd @binance is very likely to have a fractional reserve.”
Binance CEO Changpeng “CZ” Zhao indirectly referred to “BTC withdrawal issues” on the exchange, labeling them “FUD.”
“Bitcoin network fees fluctuate, 18 times in a month,” he read in part of a tweet.
As events unfolded, BTC price action felt the strain, with a short-term downtrend continuing as of this writing.
Analyzing the behavior of traders, monitoring resource Skew noted a spike in bidding activity on Binance as Bitcoin returned to the $28,000 mark.
