Bitcoin (BTC) may have hit a six-week low below $20,000, but its network fundamentals are bearish.
The latest on-chain data shows that, far from capitalization, hashrate and difficulty are making rapid gains.
The data confirms an incredible jump in difficulty
Despite falling around 7% per week, the BTC/USD pair is not deterring miners, which recently emerged from its own months-long capping phase.
Now, with hardware and competition returning to the network, the fundamentals are firmly in bullish mode only as August draws to a close.
This trend is best illustrated by difficulty – a reflection of, among other things, the scale of competition between miners for block subsidies – which is expected to rise by around 6.8% next week.
According to data from the BTC.com chain tracking platform, this is the biggest increase in difficulty since January of this year.
Additionally, if the 6.8% increase materializes, the difficulty will reach new all-time highs.
“We could see a big enough jump in difficulty to establish a new (or almost new) ATH within a few days,” predicted bitcoin mining consultancy Blocksbridge in the latest edition of its regular newsletter, “Miner Weekly,” published 27 August.
However, Blocksbridge noted that the current climate is not easy for all participants in the network. Those with older equipment, for example, are hurt by spot price losses and the corresponding reduction in the value of subsidies and block charges compared to costs such as electricity.
“In short, the bear market is crushing those with inefficient mining fleets,” the report continues.
Hashrate rebounds to an all-time high
Back to more bullish numbers, the bitcoin hashrate seems to be copying the difficulties of a fresh push to new highs.
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According to data provided by tracking platform MiningPoolStats, the hashrate was at 246 exahashes per second (EH/s) as of August 22, slightly below the all-time high of 251 EH/s reached at the end of the month April.
The hashrate is always an estimate, and fluctuations in its value do not imply a direct increase or decrease in miner activity.
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