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Bitcoin mining woes face biggest downward adjustment since 2022
Bitcoin mining woes face biggest downward adjustment since 2022
Bitcoin (BTC) is facing the risk of collapsing below $61,000, as it tested familiar trend lines for support, causing its price to decline. Despite short-term volatility impacting liquidity, BTC has not had significant upward momentum. Traders were closely monitoring the 100-day simple moving average (SMA) and short-term holder price realized (STH-RP), which are considered crucial support levels in a bull market. Last week, BTC briefly fell to $56,500, but did not breach these levels for an extended period.
At the time of writing, the 100-day SMA and STH-RP were at $61,200 and $60,100, respectively. Skew, a popular trader, highlighted the importance of the 100-day SMA and the monthly open at $60,600 on longer time frames. He stressed the importance of seeing evidence of seller uptake to confirm strong demand.
Bitcoin’s price movements have also impacted the network’s fundamentals. At the time of this writing, mining difficulty, a measure of the computational effort required to mine new BTC, was reported to have decreased by 5.5%. This adjustment was the largest downward correction since the end of the 2022 bear market, when BTC was trading below $20,000. Currently, the difficulty is at an all-time high of 83.23 trillion.
Analysts noted that the hashrate, another important parameter in mining, was already declining. However, what mattered to miners was the difficulty level, which determines how much Bitcoin they can mine per unit of computational power. Difficulty adjustments occur approximately every 14 days, and assuming a -7% adjustment, the difficulty hashrate would be approximately 585 EH/s. Despite the drop, the hashrate remained above previous forecasts, indicating ongoing mining activity.