What about Bitcoin [BTC] when things get “difficult”

by James · October 24, 2022

Bitcoin mining has been the subject of many controversies recently. In fact, the same has led to many heated discussions between advocates and critics in recent years. Especially when it comes to mining’s impact on the environment and the profitability of miners.

Now, while there is no stopping these discussions, a change in Bitcoin difficulty was recently observed. In what is a new development, BTCmining problems have once again risen on the charts.

Here is AMBCryptos Bitcoin price prediction for 2022-2023.

According to a tweet by Colin Wu, Bitcoin initiated a mining difficulty adjustment at a block height of 760,032 on October 24. Mining difficulty increased by 3.44% to 36.84T.

This meant that miners now have to put in more computing power to be able to mine a particular block.

Hasting it out

As a result of the increase in difficulty, the hashrate of Bitcoin gradually increased over the past month. This suggests that more mining machines will come online to mine Bitcoin and thus make the network more secure.

Source: Messari

However, despite the growth in terms of hashrate, the fees collected in recent days have decreased. The same can be proved by the diagram attached below.

Along with this development, mining revenues also fell and showed quite a lot of volatility in the last month, according to data provided by Glassnode. If the potential to generate income from mining continues to fall, there will be a lot of selling pressure on miners as they will be forced to sell the Bitcoin that they mine in order to make money.

Source: Glassnode

Trouble in paradise

However, it wasn’t just the miners who were at risk of not making money. Bitcoin holders faced the same threat in the last 30 days as well. As can be observed, the daily transaction volume in the chain fell in excess in the last month.

Along with that, Bitcoin’s speed also weakened, indicating that the frequency with which Bitcoin was exchanged between addresses decreased significantly.

And it wasn’t just retail investors who started losing interest, Bitcoin whales also started losing interest over the past two months as addresses with more than $1 million as their balances fell by 60.42%according to Messari

These factors, combined with a declining MVRV ratio, seemed to paint a bearish picture for the future of BTC.