Does anyone know why this is the case? Surely it would drop right since the fees are outrageous and would move other people to buy other coins?
there are two things happening:
1) the market doesn't care about fees. if there are people selling because fees are too high (perhaps to buy other cryptocurrencies), then that supply is being absorbed by speculators who expect a higher bitcoin price. price is all about supply and demand. if speculative investors are in control of the market, it doesn't matter that small BTC payments are becoming uneconomical.
2) there is also another consideration: high fees prevent people from spending, encouraging holding. this lowers supply, increasing the price.