Why Bitcoin Hash Rate and Mining Difficulty Headed Higher is Great News for Bulls

The difficulty of mining a bitcoin block has increased by nearly 10% during the latest adjustment, suggesting more miners are coming back online as prices continue to recover.

The adjustment to block height 772,128 is the largest decline since October 10, 2022, when the metric rose 13.55%. The mining pool shows data from BTC.com, More specifically, the difficulty has climbed to 37.59 trillion from the previous 34.09 trillion.

In a tweet following the adjustment, mining pool f2pool said, “Bitcoin mining difficulty has increased by 10.26% to ATH.” Can run profitably on $0.08/kWh of electricity.”

Bitcoin mining difficulty is a measure of how difficult it is to find a bitcoin block or, in more technical terms, to find a hash below a given target. A higher difficulty means that more computing power will be required to mine the same number of blocks, making the network more secure against attacks.

Historically, periods of high prices have been accompanied by a high network difficulty. Conversely, a drop in BTC prices sometimes forces miners to go offline as it becomes unprofitable, leading to a decrease in mining difficulty.

The latest increase in difficulty comes as bitcoin broke above key resistance levels over the weekend and extended its rallies. The world’s largest cryptocurrency has crossed the $21,000 price mark at one point in the past day and is currently trading around $20,800.

Last year was one of the worst on record for the crypto sector, with over a trillion dollars in value wiped off the market. Rising interest rates as well as concerns about an economic slowdown blamed further declines in prices.

The overall bad market conditions affect crypto mining pools as well. As mentioned, Core Scientific, one of the largest bitcoin mining companies, filed for bankruptcy In December last year, amid a collapse in cryptocurrency prices and skyrocketing energy prices.

In a court filing, Core Scientific said it suffered losses Net loss of $434.8 million for the three months ending September 30, 2022, and had only $4 million in liquidity at the time of the bankruptcy filing.

Apart from Core Scientific, other crypto mining firms are also struggling amid the market downturn. Argo Blockchain, Iris Energy, and Greenidge Generation are among the more notable bitcoin mining companies facing financial issues.