Bitcoin [BTC], the struggle of the largest cryptocurrency continues to see new days and new nights in the cryptocurrency market. While investors feared losing their savings due to the price correction, BTC miners may have taken another route to tackle this fall.
Bitcoin recorded its worst performance in August since 2015 after the monthly candle closed down 14%. In fact, as of press time, BTC has dropped below the $ 2ok threshold as it traded around $ 19.9k. Here is a seven-day layout painted red for the larger token.
After the free fall, many analysts have drawn bearish trends to alert Bitcoin enthusiasts. For example, Crypto Tony warned that the (Bitcoin) stadium was poised for deeper losses in the future. In a tweet sent on September 1, the famous trader added,
This is my continuous macro #Bitcoin currently and until we see
– A change in market behavior and a macro upside (taking away $ 30,000 and entering a higher high)
I am moving towards a macro dropdown menu, in which I will try to scale #Altcoin for swings https://t.co/qz7RAgw4gH
– Crypto Tony (@CryptoTony__) 1 September 2022
Needless to say, the aforementioned decline also saw heavy liquidations with the BTC spot market. This means that traders have started selling their holdings. But not everyone has taken the same approach.
Less busy road
Surprisingly, miners have not yet given up on Bitcoin as the mining difficulty has reached a significant level. BTC introduced a mining difficulty adjustment to block height of 751,968 and the mining difficulty increased significantly by 9.26% to 30.98T.
According to data from on-chain tracking resource BTC.com, this will be the highest difficulty adjustment to the upside since January of this year.
Additionally, this figure has represented a 9.26% increase since August 18, when mining difficulty stood at 28.35 trillion.
Well, the difficulty of mining determines how difficult it is for a miner to verify transactions, group them into a block and add it to the blockchain.
If there are few miners, the difficulty will decrease, while as the number of miners increases, the mining difficulty also increases. Ergo, the increase means pure demand.
What does it imply?
Well, both the difficulty and the hash rate have increased, reflecting the miners’ belief in the long-term profitability of their participation in the network. This belief comes at a time when mining operations would not reap the same benefits (profitability).
According to BitInfoCharts, mining profitability has steadily declined since August 18, when it stood at $ 0.109 per THash / s (based on a seven-day moving average).
At the time of writing, the profitability has dropped to just $ 0.082 per THash / s. Indeed, a worrying sign when coupled with falling BTC prices. In fact, the price fell 17% in a month and 60% in a year.
Now the question remains: Could the miners bear those losses and continue their mining operations? We wait and watch.