Bitcoin On-Chain Fees Surge 42% In May, Dominance Rebounds

On May 19, the average Bitcoin on-chain fee for the past seven days surged to $2.40, marking a significant increase of approximately $1 since early May. This rise has set a new high for the year, indicating a heightened demand for Bitcoin transactions. Concurrently, data from Glassnode reveals that the non-liquid supply of Bitcoin, which refers to the amount of BTC held for the long term, has reached an all-time high. This suggests that a substantial portion of Bitcoin holders are opting to retain their assets rather than sell, contributing to a scarcity in the market.

Analysts have noted that Bitcoin's dominance in the cryptocurrency market has rebounded, signaling that the recent pullback was likely a liquidity adjustment rather than the onset of an "altcoin season." This rebound in dominance indicates that investors are once again favoring Bitcoin over other cryptocurrencies. The continuous reduction of exchange balances, coupled with rising demand, may exacerbate the supply shortage, potentially driving the price of Bitcoin even higher. This dynamic underscores the growing confidence in Bitcoin as a store of value and a hedge against market volatility.

The surge in transaction fees and the increasing non-liquid supply of Bitcoin highlight a market where demand is outpacing supply. As more investors hold onto their Bitcoin, the available supply for trading decreases, which can lead to higher prices. The current market conditions suggest that Bitcoin is poised to challenge its all-time high, driven by both speculative interest and its perceived value as a long-term investment. The combination of these factors creates a bullish outlook for Bitcoin, with the potential for further price appreciation in the near future.