Bitcoin hash rate plummeted 45% from its highest level in 2020
The hash rate of the Bitcoin network has just dropped dramatically, currently 45% lower than the peak of 2020. The network’s hash rate has decreased from 136.2 EH/s (March 1) to 75.7 EH/s today, March 26, according to data from Blockchain.com.
Bitcoin has just gone through the 2nd largest difficulty adjustment in history
Another data from Coin.dance (though slightly different in choosing a timeline) shows that the peak of 2020 is 150 EH/s (on March 5), to the threshold of 105.6 EH/s. Today is the 29% decrease in this index. The hash rate of the cryptocurrency is a parameter that shows the level of computation that the network can perform in every second. The higher this index, the greater the level of competition among miners, and is also a factor in ensuring the network is safe from 51% attacks.
Bitcoin network hash rate, April 19, 2019–March 27, 2020 | Source: Blockchain.com
After a month of volatility, the difficulty of mining the network dropped nearly 16% yesterday. Accordingly, this difficulty index will be adjusted after 2016 blocks (about two weeks), to ensure each block will take about 10 minutes to form.
What does the current data show us?
The correlation between price, hash rate, and difficulty were factors for the analysts to evaluate the miner’s exit cycle.
The theory holds that the higher the price of Bitcoin, the more profitable it will be to mine the hash rate, and the difficulty will increase until it reaches a certain threshold, which makes miners have to sell their coins to maintain their activity. The sale of coins from there also makes the supply on the market increase.
Once the “setback point” is reached, the point where miners are unable to continue mining, the hash rate will then decrease, thus helping to restructure the network’s difficulty.
According to data from btc.com, Bitcoin’s difficulty is currently expected to decrease by another 16% in the next 14 days.
History of adjusting Bitcoin mining difficulty
One of Bitcoin’s most significant difficulty adjustments took place on March 25, with an adjustment of 15.95%. The last time Bitcoin’s difficulty in mining dropped sharply was on February 25, 2020, when Bitcoin was trading at $ 9,989.39. Three days later, Bitcoin plummeted to $ 8,785. By March 14, the BTC price fell to $ 4,830.
Chart of changing BTC difficulty and BTC price
The previous significant bearish correction occurred on November 7, 2019. The Bitcoin price on this day closed at $ 9,310. A few days later, on November 26, the price dropped to $ 6,907.
However, in Bitcoin’s history, the most significant difficulty adjustment was nine years ago, with a difficulty reduction of 18.03%.
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