Mempool Analysis: What Transaction Fees Reveal About the Market

Transaction fees show how strong the demand for space in Bitcoin blocks is right now. Because the supply of block space is fixed, every change in demand feeds straight into the price. A full mempool and high fees mean: many people want to write something to the blockchain at the same time. What exactly they want, and whether it says anything about the bitcoin price, the fees alone don't tell you.

How the mempool works, how miners choose by sat/vB and what happens when the mempool is full is explained in What is a mempool?. How to choose the right fee yourself and free a stuck transaction is covered in Understanding Bitcoin transaction fees. This article is about something else: what can you read about the market from fees and the mempool?

Fees are a price with fixed supply

For most goods, supply reacts to demand. If demand for hotel rooms rises, someone eventually builds a new hotel. With Bitcoin blocks that doesn't happen. A block may weigh at most 4’000’000 weight units, and the difficulty makes sure one arrives every ten minutes on average. There is no more space, no matter how much someone pays.

It follows that the fee is a very direct measure of demand. If few transactions want into the next block, the minimum fee is enough. If more want in than fit, they bid against each other, and the price rises until enough senders give up or wait.

Every new block clears a piece of the mempool. Here are the most recent blocks:

Three measures and what they reveal

Anyone reading the mempool as a market signal looks at three numbers. Each answers a different question.

Mempool size alone says little. It often holds tens of thousands of transactions paying the minimum fee whose senders are deliberately waiting. On 13.11.2026 it was about 30 vMB, and almost all of it offered 0.1 to 0.12 sat/vB. That is not a crowd but a patient remainder. What matters is the amount above a noticeable rate, say above 5 or 10 sat/vB. If that grows, space gets tight.

The fee rate shows urgency in the moment. It jumps quickly, sometimes within an hour. Fees per block over days and weeks show whether a rush was short or is lasting.

The big fee spikes

Three phases stand out in the data. Each had a different trigger. The fee rates come from mempool.space (median rate of a day's blocks), the prices from the daily closes this site uses.

December 2017: crowding at the peak

In December 2017 Bitcoin reached its high of the time, with a closing price of $19’641 on 16.12.2017. Many new buyers sent money to exchanges and withdrew bitcoin from them, and many holders wanted to sell. SegWit had only been activated in August 2017 and was barely used. Exchanges rarely batched withdrawals. Every transaction therefore took up more space than today.

The most expensive day came six days after the price peak: on 22.12.2017 the median fee rate was 936 sat/vB, and the price had already fallen to $14’306. So fees were not a herald of the peak. They accompanied the rush around the peak, and were highest when many people wanted to reach exchanges at the same time.

May 2023: inscriptions instead of payments

At the start of 2023 the Ordinals protocol arrived. It lets people store images and text in the signature data of a transaction, so-called inscriptions. In spring 2023 came BRC-20, a token format built on such inscriptions. Anyone who wanted to mint a new token needed a Bitcoin transaction for it, and fast, before others got there first.

On 08.05.2023 the median fee rate reached 436 sat/vB. On 7 May Binance temporarily paused bitcoin withdrawals, citing network congestion. The price was $27’666, far below the 2021 high. Here the fees had little to do with demand for bitcoin as money. It was demand for block space for an entirely different purpose.

April 2024: halving and Runes

On 20.04.2024 block 840’000 was found, the block of the fourth halving. Runes, another token protocol, launched in the same block. Many wanted to create their token in exactly this block. The miner of block 840’000 received 37.6 BTC in fees, twelve times the new subsidy of 3.125 BTC. The day's median fee rate was 872 sat/vB.

The crowding lasted a few days. After that fees fell quickly, and over 2024 and 2025 interest in Runes and inscriptions faded markedly. What each halving meant for price and miners is shown in the halvings in review.

Quiet phases: what low fees mean

Since early 2025 blocks have rarely been full. The median fee rate was 2 sat/vB in 2025 and 1 sat/vB in 2026 up to November. The most expensive day of 2026 reached 4 sat/vB. Since version 29.1, Bitcoin Core relays transactions from 0.1 sat/vB, and many senders use that.

At the same time the price climbed to a record: a closing price of $124’673 on 06.10.2025. A price high with empty blocks is something nobody would have expected in 2017. There are several reasons:

• Trading happens elsewhere. Anyone buying and selling on an exchange only moves numbers in its database. Only the withdrawal lands on the blockchain.
• ETFs keep the bitcoin with the custodian. Anyone buying shares of a spot ETF trades on the stock exchange. The bitcoin only move when the fund buys or sells, and then in large chunks. More in Bitcoin ETF flows and holdings.
• Transactions have become leaner. SegWit and Taproot make transactions smaller, and exchanges batch many withdrawals into one.
• Small payments go over Lightning. They need no block space, except for opening and closing a channel.
• The token frenzy is over. Demand from inscriptions and Runes, which drove the spikes in 2023 and 2024, has dropped sharply.

So low fees don't mean nobody uses Bitcoin. They mean that demand for space on the blockchain itself is small right now. A lot of use happens one layer above.

Exchange flows and consolidation in the mempool

A large share of transactions comes from a few large senders: exchanges, custodians, payment services. Their behaviour shapes the mempool, and some of it can be recognised.

Batched withdrawals. Exchanges collect their customers' withdrawals and send them in one transaction with many outputs. That saves space. In the mempool view you see such transactions as large blocks with dozens or hundreds of outputs.

Consolidation in quiet times. Every customer deposit creates its own small amount at the exchange. Later the exchange merges many of them, with many inputs and one output. It does this when it is cheap. A large backlog at the minimum fee is often exactly that: companies and patient holders waiting for an empty hour. A mempool that clears down to its bottom layer is a sign of little pressure.

Waves during sharp price moves. When the price falls or rises fast, many want to send bitcoin to exchanges or withdraw them at the same time. The rate for the next block then rises, sometimes for a few hours. December 2017 was the clearest example.

Fees as a share of miner revenue

Miners live on two sources: the block subsidy (new bitcoin) and fees. The share of fees shows how much of the network's security users already pay for today.

Fees per block: mempool.space, as in the fees article. 2024 is missing because the halving fell in the middle of the year.

In the 144 blocks up to the morning of 13.11.2026, 3.46 BTC came from fees and 450 BTC from the subsidy, so 0.8%. There are outliers all the same: in halving block 840’000, fees made up 92% of revenue.

For miners, a low share means: their income depends almost entirely on the price and the subsidy. When the subsidy halves, half is gone unless fees rise. Whether fees can replace the subsidy in the long run is the big open question. It is the subject of What comes after the last halving? Fees as an incentive model.

Limits: why fees are no price compass

It is tempting to infer the price from fees. The data hardly support it.

• Different causes, same picture. In 2017 trading drove fees, in 2023 it was inscriptions and tokens, in 2024 a single block with a new protocol. From outside every spike looks the same.
• Fees came after the peak, not before. In December 2017 the most expensive day was six days after the price peak. Anyone waiting for fees would have been too late.
• Record price with empty blocks. The high of October 2025 came without meaningful fees. Trading has moved from the blockchain to exchanges, ETFs and Lightning.
• Efficiency shifts the scale. The same demand needs less space today than in 2017. Fee rates from different years are therefore only partly comparable.
• Short swings are noise. A busy afternoon says nothing. Only a backlog lasting days shows real, sustained demand.

What fees show well: how much demand there is for the blockchain itself and how much miners earn from it. For judging the price there are better tools, such as models built on the long-term trend.

What you take away as a saver

For long-term holders, mempool analysis is mostly practical:

• Use quiet phases. When the mempool clears down to its bottom layer, it is the best moment to merge small amounts or withdraw from the exchange.
• Sit out spikes. Fee spikes have so far lasted hours to days. If you are in no hurry, wait them out.
• Don't trade on fees. A full mempool is neither a buy signal nor a sell signal.

The concrete steps, from choosing the fee to consolidating, are in the fees article.