Why Rising Bitcoin Hash Rate and Mining Difficulty is Good News for Bulls

The difficulty of mining a bitcoin block has climbed by roughly 10% during the most recent adjustment, indicating that more miners are returning to the network as prices continue to rise.

According to data from mining pool BTC.com, the adjustment at block height 772,128 is the largest downward change since October 10, 2022, when the measure rose by 13.55%. More specifically, the difficulty has risen to 37.59 trillion from 34.09 trillion previously.

“Bitcoin mining difficulty has risen by 10.26% to an all-time high!” “Following the change, mining pool f2pool tweeted about it. “If BTC can rise above $23,000 in this 2-week cycle, machines more efficient than 40W/T can operate profitably at $0.08/kWh electricity.”

The Bitcoin mining difficulty measures how difficult it is to mine a Bitcoin block, or, in more technical terms, to discover a hash that is less than a certain value. A high difficulty indicates that mining the same number of blocks will need more computer power, making the network more secure against assaults.

Historically, increasing network difficulty has been associated with higher prices. In contrast, falling BTC prices might encourage miners to stop mining since it is no longer viable, resulting in a decrease in mining difficulty.

The current difficulty adjustment comes after Bitcoin broke through critical resistance levels over the weekend and extended its rally. The world’s largest cryptocurrency briefly surpassed the $21,000 milestone yesterday and is now trading around $20,800.

Last year was one of the worst for the crypto sector on record, with over a trillion dollars wiped out of the market. Rising interest rates, as well as aggravating fears of an economic downturn, contributed to price declines.

The general poor market circumstances have an effect on crypto mining pools. Core Scientific, one of the largest Bitcoin mining businesses, declared bankruptcy in December of last year, owing to falling cryptocurrency values and soaring energy costs.

Core Scientific stated in court records that company experienced a net loss of $434.8 million for the three months ended September 30, 2022, and had only $4 million in liquidity at the time of its bankruptcy petition.

Other crypto mining companies, in addition to Core Scientific, are failing as a result of the market collapse. Argo Blockchain, Iris Energy, and Greenidge Generation are a few of the most well-known Bitcoin mining companies that have run into financial difficulties.

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