Regardless of the turbulence in the cryptocurrency market, Bitcoin miners are encountering additional challenges in mining blocks and managing their operations. The difficulty of Bitcoin mining has reached an unprecedented peak, and what’s more significant is that this increase marks the eighth consecutive rise. This persistent trend might imply various implications for the developing crypto network.
According to the Bitcoin analysis tool CoinWarz, the current mining difficulty for Bitcoin has reached an unprecedented peak of 110.45 trillion. This increase in difficulty occurred on January 13 at block height 878,976, marking a slight jump of approximately 0.61% compared to its previous level.
Mining Difficulty Hits New ATH
Bitcoin mining difficulty measures the level of complexity involved in adding a new block to the cryptocurrency’s network. This complexity adjustment takes place approximately every 14 days or 2,016 blocks mined, with the aim of ensuring that new blocks are created on average every ten minutes. The difficulty is raised to prevent an overabundance of blocks being generated, particularly as more computational power and mining equipment join the Bitcoin network.
Over the past month, there’s been a 6.29% rise in the challenge level, and over the last three months, it’s gone up by 19.99%. However, data from CoinWarz suggests that the next adjustment, due within the next fortnight, will lower the difficulty slightly, dropping it from its all-time high of 110.45 trillion to 109.54 trillion, which equates to a decrease of 0.83%.
Bullish or Bearish Signal?
The pattern of repeated increases in Bitcoin’s difficulty has historically suggested either a positive (bullish) or negative (bearish) trend.
According to a report from Coindesk, during the previous bull market, Bitcoin’s difficulty underwent nine consecutive increases. The final increase occurred at the same time as Bitcoin reached an all-time high of around $69,000 in November 2021. Following this, a bear phase started.
In 2018, Bitcoin experienced a series of similar upgrades, but unlike in 2021, it didn’t experience a significant rally. After reaching its peak price of $20,000 in December 2017, the Bitcoin network underwent seventeen consecutive positive changes until mid-year 2018. By the time of the next negative change, Bitcoin was valued at approximately $6,000. This indicates that while the mining difficulty of Bitcoin increased, its value decreased instead.
Over the past 96 days, Bitcoin mining difficulty has seen an uptrend that started on October 9 at approximately 92.04 trillion. Subsequently, it has risen seven additional times. Despite analysts maintaining that BTC is still in a bull market with potential for further growth, the asset has faced challenges since the start of this year.
It’s yet uncertain whether Bitcoin’s current price at $91,000 marks its highest point for this cycle. We’ll have to wait and see.
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2025-01-13 19:04