Bitcoin Mining Difficulty Set to 8-Month Record Gains Despite BTC Price Drop

Bitcoin (BTC) may have hit six-week lows below $20,000, but its fundamentals are anything but bearish.

The latest on-chain data shows that, far from capitulating, the hashrate and difficulty are making quick gains.

Data supports “doozy” difficulty jumps

Despite a decline of around 7% in a week, BTC/USD is not putting off miners, who recently exited their own multi-month capitulation phase.

Now, with hardware and competition back on the grid, fundamentals are firmly in “just up” mode as August draws to a close.

This is well captured by the degree of difficulty – an expression of, among other things, the extent of competition among miners for block subsidies – which is set to increase by an estimated 6.8% next week.

According to data from chain monitoring resource BTC.com, this will be the highest upward difficulty adjustment since January of this year.

Not only that, but should the 6.8% increase materialize, the difficulty level would jump to new all-time highs.

“We may see a difficulty jump doozy enough to set a new (or near new) ATH in a few days,” Bitcoin mining consultancy Blocksbridge predicted in the latest edition of its regular newsletter, “Miner Weekly”, published in August. 27.

Still, Blocksbridge noted that the current climate was not easy for all network participants. Those with older equipment, for example, felt the squeeze thanks to spot price losses and corresponding depreciation of block subsidies and fees versus costs such as electricity.

“Long story short, the bear market is really crashing those with inefficient mining fleets,” it continued.

Hash rate returns to target all-time high

Back to more bullish numbers and Bitcoin’s hash rate appears to be copying difficulties in a new push for new records.

Related: Still growing — Armenian mine operator ramps up power plant capacity

According to estimated data from monitoring site MiningPoolStats, the hash rate was up to 246 exahashes per second (EH/s) as of August 22, inches from the all-time high of 251 EH/s measured in late April.

Hash rate is always an estimate, and its value fluctuations do not imply direct increases or decreases in miner activity.

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