Bitcoin Transaction Fees Surge 42% Amid Institutional Accumulation

Bitcoin's transaction fees have surged to a yearly high of $2.4, marking a 42% increase over the past day. This spike in fees reflects a strong demand for Bitcoin transactions, as users compete for block space, driving up the cost of processing transactions. The average on-chain fee has increased by $1 since the start of May 2025, indicating heightened network congestion and intense market activity.

Transaction fees are directly influenced by the competition for block space, with miners prioritizing transactions that offer higher fees. When fees rise sharply, it signals that more users, both individuals and bots, are vying to have their transactions processed quickly. Interestingly, despite the surge in fees, transaction volume has dropped to a low of $378K. This disconnect suggests that large entities are fiercely competing to get their transactions validated, even as overall transaction activity declines.

The surge in transaction fees indicates a slowdown in retail activity, while institutions and whales are making priority transfers, suggesting ongoing accumulation. This accumulation is further supported by a sharp increase in Bitcoin’s Illiquid Supply, which has reached a new high. The metric also highlights that long-held Bitcoin remains untouched, signaling that long-term holders are retaining their assets rather than selling. The supply held by long-term holders has surged from 14.3 million BTC to 15.8 million BTC, marking an increase of 1.5 million BTC—a strong sign of accumulation within this group.

Given this heightened activity, it’s clear that rising demand for Bitcoin among large players has contributed to the spike in transaction fees. As accumulation intensifies, transaction fees continue to climb, reflecting the growing competition to secure block space. This demand for BTC also had a positive impact on BTC price actions. As fees surged, Bitcoin also breached the $105k resistance to hit $107,115 before a pullback. Since reaching these levels, Bitcoin has retraced to $102,853, signaling a market cooldown. Therefore, as of now the market has cooled down, with demand from large holders dropping from the previously witnessed levels, while retail activity also remains down.

These conditions position Bitcoin for further consolidation, as witnessed when LTH demand is absorbing retailer indifference. Therefore, if these conditions hold, we could see BTC continue to trade between $100k and $105k. For a sustained breakout, retail activity needs to recover, thus supporting large holders’ bullishness. A shift in sentiment among retailers and speculators could see another jump above $105k to $108k.