Bitcoin’s price was down 5.3 per cent at $27,420.73, as per Coin Metrics

Bitcoin dropped to start the week, stretching losses from a steep decline over the weekend after reports by one of the world’s largest crypto exchanges about “congestion” on the Bitcoin network.

Bitcoin’s price was down 5.3 per cent at $27,420.73, as per Coin Metrics. It has dropped 7 per cent since Saturday. Ether shed 4.3 per cent on Monday to $1,833.72.

Reports of a big bitcoin outflow and withdrawals being halted at a leading exchange could be factoring into some of the weakness. Eventually though, there have not been any big developments in terms of price action, with bitcoin still very much restricted to a multiday bullish consolidation, according to Joel Kruger, market strategist at LMAX Group.

Only a break back below $25k would give cause for concern. Until then, we surmise dips will continue to be very well supported, Kruger further said.

Monday’s decline came after Binance tweeted Sunday that the Bitcoin network was experiencing congestion and that it was temporarily halting bitcoin withdrawals because of this until the network stabilized. Some market participants have contended that the Bitcoin network is stable and Binance should have prepared for a high-fee environment on Bitcoin.

The issue has underlined a long-known drawback of the Bitcoin network: It was not designed to manage large volumes of transactions. It processes only seven to 10 transactions per second, making it unsuitable as a potential competitor to firms like Visa and Mastercard — a notion many have explored over the years but largely put to rest. This is why projects like the Lightning Network, which assists speed up transactions without impacting the network, have grown in popularity.