Bitcoin transaction fees decrease by 95% as BTC value rebounds following US government concerns.

Bitcoin (BTC) faced challenges in bouncing back from recent losses on May 11, as a false alarm regarding U.S. government sales unsettled the markets.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Analysts refute U.S. government BTC sales

Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD was hovering around $27,400 at the time of this report.

The pair experienced a sudden sell-off the previous day, briefly dropping to $26,850 following assertions that confiscated BTC held by the U.S. government was being liquidated.

This claim was later disproven, but the impact on already volatile crypto markets was significant.

Glassnode not indicating any reduction in the U.S. Government’s Bitcoin balance
4 pic.twitter.com/rJHcQ2B8Kc

— Will Clemente (@WClementeIII) May 10, 2023

Among traders, Jackis characterized the recent lows as a “scam” maneuver, while predicting further declines ahead.

“When the movement feels like a scam and behaves like a scam then treat it as such,” he tweeted.

“I do anticipate a breakdown lower sooner or later. I’m uncertain about the extent but ready to act swiftly if needed.”

Another trader, Anbessa, also confirmed his outlook for additional downside, targeting a zone around the $25,000 level.

#Bitcoin Roof Pattern
Consolidation at neckline $27369
after successfully hitting all shorts starting from $30,4k
1.LONG breakout $27666 if you’re tethered or
2.LONG here with a Stop Loss below $27269
HTF pattern breakout above $28882
while I’m still anticipating a pullback to $25,2k… pic.twitter.com/TYZXGyxNFz

— AN₿ESSA (@Anbessa100) May 11, 2023

Meanwhile, financial commentator Tedtalksmacro referred to May 10 as “just another day in crypto.”

In a Twitter recap of the day’s occurrences, he noted that U.S. inflation data had been favorable for risk asset bulls, suggesting that further declines could be expected in the upcoming months.

Next-block Bitcoin fee falls below $2

In a positive development for Bitcoin enthusiasts, the last 24 hours witnessed a significant change in on-chain transaction fees, which decreased considerably after reaching levels that had caused widespread concern.

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Current figures from Mempool.space indicated next-block fee rates at 47 satoshis ($1.80) per byte at the time of this report.

As per data from monitoring service BitInfoCharts, on May 10, the average fee dropped below $15 — a reduction of over 50% from the previous day.

In response, Checkmate, the lead on-chain analyst at Glassnode, criticized those who had advocated for code-altering measures to prevent future fee spikes.

As Cointelegraph reported, fees had surged due to a significant increase in on-chain activity and demand for block space driven by Ordinals inscriptions.

“24 hours later, the average fees paid per block have reverted to approximately 1.0 $BTC per block. Imagine arguing for changes to Bitcoin rules due to a temporary fee spike caused by users employing the chain in ways you don’t support,” he tweeted alongside a chart.

“Attempting to change the rules is the real attack, not the inscriptions.”

Bitcoin Average Fee Paid Per Block chart. Source: Checkmate/ Twitter

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This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making any choices.