Monday morning saw Bitcoin's price fall below the $41,000 mark, erasing gains from the previous week as the cryptocurrency rally cooled.
At the time of publication, Bitcoin was trading at just over $40,900, marking a decrease of 2.9% in the last 24 hours and 3.9% over the week, as per TradingView data.
The price slump coincides with a significant increase in Bitcoin's average transaction fee, which has hit a yearly high of $38.43.
This surge is attributed to the rising popularity of Bitcoin Ordinals, unique digital assets inscribed on satoshis, Bitcoin's smallest unit. Analysis by Dune Analytics and "@dgtl_assets" shows that miners earned nearly $10 million in transaction fees from Ordinals on December 16th, and $8.4 million on December 17th.
High transaction fees caused by Ordinals are also leading to congestion in the Bitcoin network. Mempool.space data indicates nearly 290,000 unconfirmed transactions, with fees under $1.37 receiving no priority.
Wider market impact
The downtrend in Bitcoin's value is reflected across the cryptocurrency market. The total market cap for all cryptocurrencies has fallen by 3.5% in the past day to $1.59 trillion.
Except for stablecoins, every coin in the top 20 by market cap on CoinGecko is trading down. Avalanche has experienced the most significant drop within the top 20, decreasing by over 11% in the last 24 hours.
Ethereum, the second-largest cryptocurrency by market cap, is also down, trading at around $2,100, a nearly 4% decline. The market slump has notably affected meme coins, with Dogecoin, Shiba Inu, and the Solana-based BONK all experiencing significant drops of 8%, 10%, and over 12%, respectively.
