Bitcoin
Bitcoin Mining Difficulty Faces Biggest Downward Adjustment Since 2022
Bitcoin Mining Difficulty Faces Biggest Downward Adjustment Since 2022
Bitcoin (BTC) is facing the risk of falling below $61,000 as it tested familiar trendlines for support, causing its price to fall. Despite low term volatility affecting liquidity, BTC lacked significant upward momentum. Traders were closely monitoring the 100-day simple moving average (SMA) and short-term holder realized price (STH-RP), which are considered crucial support levels in a bull market. Last week, BTC briefly dropped to $56,500 but did not breach these levels for an extended period.
At the time of writing, the 100-day SMA and STH-RP are at $61,200 and $60,100, respectively. Skew, a popular trader, highlighted the importance of the 100-day SMA and the monthly opening of $60,600 on higher time frames. He emphasized the importance of seeing evidence of seller absorption to confirm strong demand.
Bitcoin’s price movements have also had an impact on the network’s fundamentals. Mining difficulty, a measure of the computational effort required to mine new BTC, was expected to decrease by 5.5% at the time of writing. This adjustment was the biggest downward correction since the end of the 2021 bear market when BTC was trading below $20,000. Currently, the difficulty is at an all-time high of 83.23 trillion.
Analysts noted that hashrate, another important metric in mining, was already in decline. However, what mattered to miners was the difficulty level, which determines how much Bitcoin they can mine per unit of computing power. Difficulty adjustments occur approximately every 14 days, and assuming a -7% adjustment, the difficulty hashrate would be around 585 EH/s. Despite the drop in hashrate, it remained above previous forecasts, indicating continued mining activity.