Transaction fees on the Bitcoin network have been steadily rising over the past two years, offering a welcome source of income for miners facing diminishing block rewards due to halving events.

Uptick in Bitcoin Miners’ Earnings

Transaction fees now account for over 7% of miners’ total earnings, compared to just 1% two years ago, according to Ki Young Ju, CEO of CryptoQuant. On May 5th, fees even made up more than 22% of total mining revenue.

This trend is attributed to novel token protocols like Ordinals and Runes, enabling the creation of NFTs and fungible tokens on Bitcoin, leading to higher transaction volume.

Why It Matters

The rise in transaction fees helps mitigate the impact of decreasing block rewards caused by halving, where the amount of Bitcoin awarded per block gets cut in half every few years. Miner revenue consists of two parts: fixed block subsidy and transaction fees. As block rewards decrease, transaction fees become a more crucial source of income.

The recent halving event showcased this shift. When block rewards were halved, transaction fees skyrocketed to an all-time high, capturing over 60% of total revenue.

U.S. Government Seizes Large Bitcoin Fortune from Drug Trafficker

Blockchain analytics firm Arkham identified a Bitcoin address containing nearly 4,000 BTC (worth $251 million) seized by U.S. authorities from Banmeet Singh, a Canadian drug trafficker convicted in January 2023. Singh used the alias “mohalipranav” to operate a dark web narcotics vendor account and launder his profits through Bitcoin.

This seizure represents one of the largest confiscations of crypto linked to criminal activity by U.S. authorities to date. The discovery highlights the growing role of blockchain forensics companies like Arkham in assisting regulators with tracking and recovering crypto-fueled crime proceeds.

Bitcoin Exchange Inflows at Lowest in a Decade, Signalling Potential Bullishness?

On-chain data shows a recent decline in Bitcoin exchange inflows, potentially indicating a bullish sign for the asset. Exchange inflows refer to the total amount of Bitcoin deposited into wallets connected to centralized exchanges.

High exchange inflows often suggest investors are preparing to sell, potentially leading to a bearish trend. Conversely, low inflows, as seen currently (the lowest since 2015), could imply reduced selling pressure, potentially favoring a price increase.

However, alternative explanations exist. The declining role of exchanges and the rise of alternative investment options like spot ETFs might be contributing factors.

Bitcoin Price Poised for Breakout as Bullish Signals Emerge

Bitcoin recently recovered above $65,000 but has since retreated to around $63,100. Several analysts are optimistic about Bitcoin’s future price movement.

Willy Woo, a popular analyst, observed a bullish divergence between Bitcoin’s price and the Volume-Weighted Average Price (VWAP) oscillator, suggesting room for growth.

Technical indicators on the hourly chart also show bullish signals, with Bitcoin currently trading above the 100-day moving average and a key trend line offering support. A clear break above resistance levels at $64,500 and $65,500 could propel the price further upwards.

Bitcoin’s 200-Day Moving Average Hits All-Time High, Suggesting Long-Term Bullishness

Bitcoin’s 200-day moving average, a key indicator of long-term trends, recently reached an all-time high of $50,178. This suggests a potentially bullish long-term outlook, even if the price experiences short-term volatility.

Anthony Pompliano, a well-known Bitcoin investor, emphasized the long-term strength of Bitcoin’s underlying fundamentals despite short-term price fluctuations. Supporting this view, Willy Woo’s charts display an all-time high for the 200-week moving average, reinforcing the long-term bullish perspective.

Overall, Bitcoin’s ecosystem is experiencing a confluence of positive developments. Rising transaction fees are bolstering miner revenue, while on-chain data and technical indicators suggest potential price increases. Additionally, Bitcoin’s long-term outlook remains promising according to key moving averages.