Monday 30 January 2023
Home / none / BTC difficulty drops by the biggest margin since 2021

BTC difficulty drops by the biggest margin since 2021

Tough market conditions continue to affect the Bitcoin (BTC) ecosystem as mining difficulty drops by its biggest margin since July 2021.

A 7.32% difficulty adjustment took place on Dec. 6 at block height 766,080, marking the sharpest drop in difficulty in over a year. This coincided with a drop in average hashrate from 264.18 EH/s to 245.10 EH/s, according to data from

Bitcoin’s mining difficulty automatically adjusts to the amount of hashing power available to the network, essentially controlling the rate at which new Bitcoin blocks are added to the chain to an average of 10 minutes.

The difficulty adjusts every 2,016 blocks, meaning that this latest drop in difficulty will last around two weeks.

The adjustment could be seen as reprieve for Bitcoin miners that have had to endure a tumultuous 2022 which has left some small and large operators with no choice but to shut-up shop.

Related: Crypto miners in Russia capitalize on the bear market by hoarding ASIC devices

As previously reported by Cointelegraph, the third quarter of this year saw increased cost to produce new BTC coincided with dropping value of the preeminent cryptocurrency. Rising energy costs dug further into miner profit margins in the U.S. and Europe, leading some operations to shut down.

The revenue of Bitcoin miners fell to two-year lows at the end of November, exacerbated by poor cryptocurrency market performance and heavier computational demands. This eventually led to capitulation of some mining operations which has led to a recent drop in hash rates which accounts for the latest difficulty adjustment.

Bitcoin mining analyst Jaran Mellerud shared his thoughts in a Twitter thread on Dec. 3, highlighting that the most recent drop in hashrate is most likely due increasing electricity prices:

“Many miners operate close to cash flow break-even and will be forced to turn off their machines if market conditions worsen.”

Mellerud also argued that significant increases in hashrate up until Q2 2023 could be expected if the price of Bitcoin rises through the end of the year.

Original Article

About Jude Savage

Check Also

Solana price rally risks exhaustion after SOL’s 120% pump in two weeks

Solana (SOL) price is up an impressive 60% since the new year, partially boosted by hype surrounding meme cryptocurrency Bonk (BONK). However, the SOL/USD pair now shows signs of exhaustion, raising anticipations that the token may see a short-term correction in the coming days. Solana turns overboughtSolana is one of the best performing cryptocurrencies so far in 2023 after being one of the biggest losers in 2022. On Jan. 9, SOL's price jumped to as high as $19.50, or around 120% gains in a recovery rally after sliding below $8 on Dec. 29, 2022. But the price spik also turned Solana into an overbought asset, per its daily relative strength index (RSI) reading above 70, as shown below. SOL/USD daily price chart. Source: TradingViewTraditional investors typically see an overbought RSI as a potential sell signal, given the indicator has historically coincided with a period of buyer exhaustion. As a result, SOL's price could enter a correction or a sideways consolidation stag..

Leave a Reply

Your email address will not be published. Required fields are marked *