Bitcoin's price dived overnight Sunday into early Monday as a trading network saw a congested transaction backlog and high transaction fees. Binance, the world's largest cryptocurrency exchange, temporarily halted withdrawals multiple times before resuming operations around 8:30 a.m. ET.
As of 9 a.m. ET Monday, there were 444,990 unconfirmed bitcoin transactions in the network's mempool, or memory pool, according to bitcoin data site mempool.space. The mempool stores unconfirmed transactions before adding them to the blockchain. When a user initiates a transaction, it is stored in the mempool until it's selected by a bitcoin miner. It is then inserted into the next block, validated and added to the chain.
Miners may prioritize smaller transactions that are easier to process or those with higher fees. That can leave lower-fee and larger transactions stranded for longer periods.
There were more than 200 blocks waiting for validation as of 9:50 a.m., mempool.space data showed.
During the backlog surge, bitcoin transaction fees spiked above $23 for high-priority transactions. Transaction fees averaged around $4 for high-priority transactions on May 6.
One cause may be the rise in bitcoin Ordinals. Those are inscriptions on digital assets to make content similar to non-fungible tokens (NFTs). The total number of Ordinals inscriptions rocketed to 4.69 million as of Monday from 3.06 million on May 1, Dune Analytics data shows.
Binance Pauses Withdrawals
Meanwhile, Binance paused bitcoin withdrawals on its platform twice over the past 24 hours. The trading platform cited the "congestion issue" with the network.
"There is a large volume of withdrawal transactions from Binance still pending as our set fees did not anticipate the recent surge in BTC network gas fees," Binance tweeted late Sunday night. The exchange raised its miner fees for pending withdrawals to get them picked up by mining pools.
Binance noted it will monitor on-chain activity and says it will explore using the Bitcoin Lightning Network to increase withdrawal times. The Bitcoin Lightning Network is a layer 2 protocol built on top of bitcoin that helps speed and scale transactions.
Binance noted all pending transactions were processed by around 8:30 a.m. ET.
Bitcoin Price
BTC retreated more than 5% over the past 24 hours, diving as low as $27,294 Monday from its Sunday night level around $29,100 while the network backed up. Bitcoin climbed back around $27,500 Monday afternoon after Binance transactions processed.
Ethereum and other cryptocurrency prices followed bitcoin lower overnight. Ethereum shed a little over 4% off its price, falling near $1,840 Monday from its overnight high of $1,936. ETH tumbled as low as $1,813 Monday.
Bitcoin miners Marathon Digital and Hut 8 Mining also retreated as the price fell. Binance's publicly-traded rival Coinbase eased 0.24% Monday after shares weakened 5.5% in early trading. COIN stock surged last week after Coinbase beat earnings estimates. And ARK Invest CEO Cathie Wood loaded up on shares before the report.
Bitcoin's price rocketed nearly 66% so far this year while ethereum rallied about 54%.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
