Bitcoin Block Sizes Drops to Yearly Low
20 Jun, 2024 ● Crypto News
The Bitcoin network has seen a notable decrease in its average block size and transaction rates, coinciding with a price drop to around $64,100.
The reduction in block size, which measures the transaction data included in each block, reflects a significant decline in Bitcoin blockchain activity, reaching a yearly low on June 7.
Simultaneously, the network's transaction per second (TPS) rate decreased in June, indicating reduced activity and potentially lower miner profitability due to the decreased BTC block rewards following the halving event.
In an interview with Cointelegraph, Benjamin Charbit, co-founder and CEO of Darewise Entertainment and a founding member of the OPAL foundation, remarked:
“The two main challenges that Bitcoin keeps facing are the lack of programmability and the need to scale. To address these, [a] significant focus is on layer-2 solutions and the implementation of OP_CAT.”
The BTC halving event in April reduced block rewards for miners by 50%, effectively decreasing their profits and incentives to maintain blockchain activity.
TPS varied between highs of around 28 and lows below 4.5 throughout June, with an average of 9.12 TPS at the time of writing.
Despite the downturn in BTC block size and TPS, Charbit remains optimistic for the future, stating:
“I expect the market to recover five months post-halving. The current time is great to focus on building and deploying capital to accumulate, as the floor price of most blue-chip collections has been affected.”
The performance of the Runes minting market offers additional insights into the Runes ecosystem and the overall network.
In a post on X from June 19, Leonidas noted that the Runes minting market remains profitable, reflecting continued strong user activity on the BTC blockchain.
The secondary market performance of the top 10 largest Runes mints has varied significantly, from -82.76% to +1,194.42%, indicating robust market activity.
Regarding Ordinals, Charbit told Cointelegraph:
"This decrease has impacted the Ordinals protocol by reducing the number of opportunities to inscribe digital artifacts on the blockchain, resulting in less frequent and lower volumes of Ordinals transactions being included in blocks.”
The recent decline in price and corresponding fall in network activity might be the beginning of a prolonged correction.
Crypto analyst Rekt Capital recently discussed the potential continued correction of BTC, forming “clusters of price action near the Range High resistance at ~$71,600.”
On June 17, the analyst noted that BTC was “getting very close” to retesting the $64,000 and $62,500 levels, identified as daily Chicago Mercantile Exchange gaps.
These gaps are areas in the price chart where noticeable differences can be seen between the closing price on one day and the opening price the following day.
Sources:
https://cointelegraph.com/news/bitcoin-block-size-yearly-low-halving
