Data from the on-chain monitoring resource BTC.com confirms that on August 31, Bitcoin network difficulty hit new all-time highs.
Bitcoin Seals Its Biggest Difficulty Jump Since Early 2022
Despite recent BTC price declines, Bitcoin network fundamentals are telling a bullish story as August draws to a close.
Both difficulty and hash rate are rising, reflecting miners’ belief in the long-term profitability of their network stake. It also suggests that the mining sector is absorbing lower profits versus costs in the short term.
The difficulty, which increased by 9.26% in its automated reset on August 31, is now at its highest point. The competition between miners is healthier than ever.
To compare, 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 hash rate now sits at an average of 221 exahashes per second (EH/s), within a whisker of the highest average reading ever recorded, of 223 EH/s, just before Terra LUNA’s implosion in May.
Bitcoin (BTC) fundamentals have provided a “welcome rally” that research says moves away from the classic bear market.
“Personally, I think as more hashrate comes from the US, we’re going to see a new annual seasonal trend like we used to see in China. That is to say, the warm months there will be less hashrate, we will try to stabilize the network, and the cold months there will be more hashrate”, wrote macro analyst Jason Deane in part from a Twitter response to the difficulty reset.
Bitcoin “barely holding up”
The numbers provide a welcome counterpoint to troubled spot markets and gloomy projections for the rest of 2022..
With the BTC/USD pair poised to end August down nearly 13%, on-chain analytics firm Glassnode said a bounce in fundamentals would be a useful antidote to an otherwise sour environment..
“It remains plausible that bitcoin is in a bottoming range and would be historically similar to all bear markets of the past,” he concluded in the latest edition of his regular newsletter, “The Week On-Chain.”published on August 30 and titled “Bitcoin is barely holding on.”
“However, bitcoin prices are barely holding up, and any rally in fundamentals would be a welcome change.”
The BTC/USD pair was hovering around $20,150 at the time of writing, after recovering from sub-$20,000 levels overnight.according to data from Cointelegraph Markets Pro and TradingView.
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