Data from the chain tracking platform BTC.com confirms that the difficulty of mining on the Bitcoin network reached new all-time highs on August 31st.
The Bitcoin network reaches the greatest difficulty since the beginning of 2022
Despite recent declines in BTC price, Bitcoin network fundamentals tell a bullish story as August draws to a close.
Difficulty and hashrate are increasing, reflecting the miners’ belief in the long-term profitability of participating in the network. It also suggests that the mining industry is absorbing a reduction in profits relative to short-term costs.
The difficulty, which increased by 9.26% during its automatic readjustment on August 31, was at an all-time high. Competition among miners is healthier than ever.
For comparison, the last time the difficulty increased more than once was in January (9.32%), and before that, in August 2021 (13.24%).
According to BTC.com, the hashrate currently averages 221 exahashes per second (EH/s), a hair’s breadth from the highest average on record of 223 EH/s, just prior to the Terra LUNA eruption in May.
Bitcoin (BTC) network fundamentals lead to “welcome rally” says study ending classic bear market.
“Personally, I think with the increase in hashrate from the US, we will see a new annual seasonal pattern similar to the one we used in China, ie warm months where the hashrate is lower and helps to stabilize the network, and cold months when the hashrate is higher,” said writing analyst Jason Deane as part of his Twitter response to the difficulty readjustment.
Bitcoin ‘struggling to hold its own’
The numbers are welcome against the troubled money markets and the gloomy projections for the rest of 2022.
Also read: BTC price alerts pop up as 10,000 BTC leaves wallet after 9 years of inactivity
With BTC/USD expected to fall nearly 13% at the end of August, chain analytics firm Glassnode said a fundamental pullback would be a helpful remedy for an otherwise salty environment.
“It remains plausible that bitcoin is in a bottom formation range and would be historically similar to all bear markets in the past,” she says in the latest edition of her regular newsletter, “The Week On-Chain,” which published on Tuesday August 30 and titled “Bitcoin Barely Hanging On.”
“However, bitcoin prices are just hanging on, and any change in fundamentals would be a welcome change.”
The BTC/USD pair was hovering around $20,150 at the time of writing, after recovering from levels below $20,000 overnight, according to data from Cointelegraph Markets Pro and TradingView.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Cointelegraph.com. All investment and trading involves risk. You should do your own research before making a decision.