The declining transaction fees are likely caused by huge growth in BTC’s block discovery rate, driven by a growing hashrate. On average, we saw 6.64 blocks per hour over the last seven days, well above the six blocks per hour target.
Tomorrow, the BTC network will see a massive positive difficulty adjustment. This will adjust the block discovery rate. The difficulty is estimated to increase by 7.2%, which would be the highest difficulty increase since January 21st. Following the difficulty adjustment, the block discovery rate and fees will likely grow as transactions compete to be included in fewer blocks.Nevertheless, while the difficulty adjustment might normalize the block discovery rate, the overall activity in bitcoin stays low. We saw a 3.78% decrease in transactions per day over the last seven days, suggesting that on-chain activity remains low.