Nivesh Rustgi7 hours agoBitcoin mining difficulty hits all-time high as BTC miner selling peaksIn recent weeks, BTC miners sent a record amount of Bitcoin to exchanges right as the network’s difficulty metric hit a new all-time high.2456 Total views51 Total sharesListen to article 0:00Market AnalysisJoin us on social networksBitcoin mining difficulty reached an all-time high of 53.91 trillion units after the latest difficulty adjustment on July 12. It is a measure of how difficult it is to mine Bitcoin (BTC) blocks.
The blockchain adjusts its difficulty every two weeks to maintain its processing time of 10 minutes. When the network’s processing power increases, it adjusts to make mining challenging, reducing the profitability for individual miners.
The latest adjustment will add to the pressure on miners, who have been selling off their mined BTC since June. Some analysts suspect that the lack of miner accumulation has likely restricted an uptrend in the BTC price.
With the latest difficulty adjustment, the profitability of medium- and small-scale miners will likely drop into negative territory, forcing them to temporarily turn off some of their ASIC hardware.
The potential capitulation of weaker miners could finally enable larger miners to accumulate Bitcoin, which may reduce the mining selling pressure.Are miners close to capitulation?
The hash ribbon indicator, created by independent analyst Charles Edwards, tracks the 30- and 60-day moving averages (MAs) of the network’s hash rate. When the 30-day MA falls below the 60-day MA, it is a signal that miner capitulation may be occurring, meaning unprofitable miners are moving out.
The two lines are marginally close to a crossover, and the increase in difficulty may finally provide the catalyst for the capitulation of weaker miners.BTC/USD daily price chart with the hash ribbon indicator. Source: TradingView
The exodus of weaker miners would bring more rewards for the more efficient miners, potentially allowing them to save a portion of their output instead of selling.Can Bitcoin push higher after miner selling ceases?
Recently, miners were seen unloading record amounts of BTC to exchanges. According to a K33 Research report, publicly listed miners sold 100% or more of their output in May.Monthly updates on Bitcoin sold by public miners in 2022. Source: K33 Research
In June and July, as well, the 30-day cumulative transfer volume of BTC from miner wallets to exchanges spiked to a six-year peak, suggesting that miners likely continued to unload their Bitcoin at an alarming rate.30-day cumulative volumes of BTC transferred from miners to exchanges. Source: Bitcoin Magazine
The one-hop supply of miners from Coin Metrics, which represents the total amount held in wallets that received coins from mining pools, also dipped to one-year lows. It shows that miners have been uploading more coins than their production output.
Related: Bitcoin’s pre-halving rally may start soon — Here’s whyOne-hop supply of miners. Source: Coin Metrics
While miners have resorted to selling, the supply distribution data from on-chain analytics firm Santiment shows that Bitcoin whales did the opposite.
The most prolific BTC investors, often known as whales and sharks and marked by addresses holding between 10 to 10,000 BTC, have increased their holdings by $2.15 billion since June 17.
On top of that, Bitcoin held by exchanges has fallen below 2017 levels, suggesting that investors are moving the BTC off exchanges and that Bitcoin"s illiquid supply is growing.
While the accumulation of Bitcoin among whales has previously pushed the price of BTC higher, this time, it has remained suppressed in a narrow range between $29,500 and $31,500, which could partially be due to miner selling pressure.
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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.# Bitcoin# Blockchain# Cryptocurrencies# Mining# Bitcoin Price# Bitcoin Mining# Markets# Market Analysis# Hash Rate# WhaleAdd reactionAdd reactionRelated NewsHow to create and sell Bitcoin NFTsBlackRock Bitcoin ETF could unlock $30 trillion worth of wealth, Bloomberg analyst saysBitcoin price data suggests bulls will succeed in holding $30K as support this timeBitcoin forks BCH, BSV and XEC soared last month, but are the gains organic and sustainable?Bitcoin mining stocks outperform BTC in 2023, but on-chain data points to a potential stall3 reasons why Bitcoin’s price is primed to hold the $30,000 level as support