Bitcoin mining difficulty has surged to a new all-time high of 53.91 trillion units following the most recent adjustment on July 12. This metric measures the level of difficulty in mining Bitcoin blocks, with the blockchain adjusting every two weeks to maintain a 10-minute processing time. The increase in difficulty poses challenges for individual miners and reduces profitability.
The recent spike in miner selling has coincided with the record-high difficulty level. Since June, BTC miners have been selling off their mined Bitcoin, potentially hindering an upward trend in BTC price. As the latest adjustment further decreases profitability, smaller-scale miners may suffer losses and temporarily shut down some of their ASIC miners. This situation could lead to weaker miners capitulating, allowing larger miners to accumulate more Bitcoin and alleviate the selling pressure.
The Hash Ribbon Indicator
The Hash Ribbon indicator, developed by independent analyst Charles Edwards, monitors the network’s hashrate through the 30-day and 60-day moving average (MA). A crossover between these lines indicates potential miner capitulation as unprofitable miners exit the market. The current proximity of the two lines, along with the increased difficulty, may serve as the catalyst for weaker miners’ capitulation.
If the selling pressure from miners subsides, Bitcoin could see upward movement. In recent months, publicly listed miners have been selling significant amounts of BTC, while the cumulative transfer volume from miner wallets to exchanges has reached a six-year peak. Conversely, Bitcoin whales—investors holding substantial amounts of BTC—have increased their holdings by $2.15 billion since June 17. Additionally, Bitcoin held by exchanges has decreased, indicating a shift toward off-exchange storage and reducing liquidity.
Despite the accumulation of Bitcoin by whales, the price has remained within a narrow range of $29,500 to $31,500, potentially due to the selling pressure from miners. It is important to note that this article does not provide investment advice, and readers should conduct their own research when making financial decisions.
Overall, the surge in Bitcoin mining difficulty coupled with increased miner selling has significant implications for the cryptocurrency market. This dynamic could impact the profitability of smaller miners, provide opportunities for larger miners to accumulate Bitcoin, and influence the overall price trajectory of BTC.