Mining difficulty for Bitcoin skyrockets despite the drop in BTC price

Yesterday, the mining difficulty of Bitcoin reached a record level of 83.95 trillion hashes, reflecting increased competition among miners. Paradoxically, on the same day, the price of BTC experienced a massive drop after reaching a historical peak of $73,835.

Constantly Increasing Mining Difficulty Despite Price Volatility

The Bitcoin mining difficulty continues to climb, reflecting the ongoing arrival of new miners despite a highly volatile market. March 14 marked a new peak at 83.95 trillion hashes, up from 79.35 trillion a month earlier.

This record level indicates massive investments in computing power and energy by miners. Bitcoin’s algorithm automatically adjusts the difficulty about every 2 weeks (or every 2016 blocks), to maintain a stable block mining time of 10 minutes, regardless of the number of miners.

The adjustment to 83.95 trillion hashes represents a rate of 613.94 exahash per second (EH/s), compared to 602.14 EH/s at the previous adjustment. This consistent increase underscores the high level of confidence and commitment by miners towards the Bitcoin network over the long term.

However, the timing is curious. Why such a rush to mining even as the BTC price and the overall crypto market experience a sharp correction? Is it a bet on future price recovery or a frantic dash despite bearish signals and the approaching Halving?

Bitcoin Caught in Crosswinds

March 14 was a paradoxical day for Bitcoin. Its price initially reached a new historical peak of $73,835, creating hope for a surge towards $100,000. But the trend quickly reversed, plummeting to $67,501 at the time of writing this article.

This extreme volatility spared almost no crypto. Ethereum, Solana, BNB… The major altcoins followed BTC’s sawtooth pattern, with euphoric highs quickly erased by severe corrections.

The Bitcoin price plunge led to the liquidation of nearly 200,000 traders within 24 hours. A stark reminder of the inherent risks of investing in crypto, even for BTC despite its status as a safe-haven asset.

A retreat below $70,000 is a worrying signal for analysts. Several technical supports have been broken and the fear and greed index is close to its lowest level. Will the bearish trend be long-lasting, or will the market find a new momentum? Only time will tell.