Bitcoin price is keeping stable around $9,500 and the network is also coming back to the levels it was before the halving.
The week before last, the average bitcoin transaction fees soared to nearly $7. The fee remained below $1 except for during the times of extreme volatility in the market such as at the end of June in 2019 when BTC price jumped to $13,900 or during the peak of the 2017 bull rally.
Since its peak on May 20th, the bitcoin average transaction fee has been on a constant decline and is currently at $2.25.
The tremendous increase in bitcoin transaction fees of over 160% in May came after the halving. The historic event resulted in the hash rate declining and block finding time to surge above 14 minutes as such pushing the fees higher.
Moreover, as we reported, a mysterious entity, most probably the crypto exchange Coinbase consolidated outputs at the highest fee rates which drove up fees for everyone.
The number of transactions waiting to be confirmed also contributed to this. On the day of halving, the mempool had 935k transactions which peaked at almost 95 million on May 21st. High mempool size indicates more network traffic that results in longer than average confirmation time and higher priority fees.
But 10 days after that and we are back to normal levels, as per blockchain.com.
This backlog has been clearing for over a week now. With the next difficulty adjustment expected to be another downwards of nearly 11% later this week, it will only make finding blocks that much easier, balancing things out.
“3 weeks after the Bitcoin halving the mempool is almost empty again, 1 sat transaction confirming. No mining death spiral, even though we lost nearly 50% of the hashrate, it’s bouncing back, next difficulty adjustment down less than 10%,” said Whale Panda. “Bitcoin working like it was designed to.”
Just like fees and block time, the hash rate of the network is back above 100 Th/s, up from 83 Th/s on May 14.
Also, the rainy season in Sichuan, China, one of the hottest spots for Bitcoin mining, will push down the cost of electricity to about 0.10 RMB/kWh ($0.014 USD) which will help the hash rate to further recover.