Key Points
- Bitcoin mining difficulty has reached an all-time high of 95.67 terahashes, increasing 4% in the last 24 hours.
- Miners are under increased pressure to maintain profitability as mining costs rise due to an increase in demand for computational power.
Despite the recent retraction of the Bitcoin price from $69,000 levels to $66,539, the mining difficulty of the cryptocurrency has reached an unprecedented level. The Bitcoin mining difficulty has surged to a record high of 95.67 terahashes (T), marking a 4% increase in just 24 hours.
Throughout this year, the Bitcoin blockchain has seen 22 difficulty adjustments, 13 of which have been positive. The Bitcoin hashrate, a measure of the processing power of the Bitcoin network, has also seen a significant increase, rising by 27% from 72T to 92T.
Increased Mining Difficulty and Costs
The surge in Bitcoin mining difficulty has put miners under increased pressure. As the demand for computational power grows, so does the cost of mining.
The Bitcoin halving event in April 2024, which resulted in a 50% reduction in mining rewards, led to weaker Bitcoin miners with outdated equipment exiting the industry. The departure of these small miners resulted in a 15% drop in the hashrate.
Furthermore, some miners have been partially selling their Bitcoin holdings to cover rising operational costs. Data from Glassnode shows that miner balances have been on the decline this year as weaker miners prepared for the halving and sought to fund their operations. Between November 2023 and July 2024, over 30,000 bitcoins left miner wallets, marking one of the longest distribution periods recorded.
Miner Balances Stabilizing
However, since July, miner balances have stabilized and started to show signs of accumulation. This suggests that the remaining miners are better equipped to navigate the new market environment. The Bitcoin mining industry is likely to consolidate among strong players, with public miners controlling a record share of almost 30%.
Potential for a Bitcoin Bull Run?
Bitcoin bull runs are often closely tied to rising miner revenue. As Bitcoin prices increase, so do mining earnings. According to Glassnode, the total dollar mining revenue, based on a 7-day moving average (7-DMA), has surpassed $35 million, reflecting an increase of more than $10 million since the lows observed in September.
However, since the April halving, Bitcoin mining revenue has remained below the 365-simple moving average (SMA), which currently stands around $40 million. Historically, a surge in total miner revenue past the 365-SMA has coincided with a Bitcoin bull run.
The recent retracement of the Bitcoin price from $69,000 to $66,000 has led to bearish sentiment. However, technical charts indicate that the Bitcoin price is finding support at the upper end of the channel. For the rally to continue, Bitcoin must maintain a price of $66,000.
