Although the price of bitcoin has crashed in the past 24 hours with double-digit percetages, the network’s fundamentals remain strong. Recent data indicated that BTC’s mining difficulty and the hash rate had reached new all-time highs.
The mining difficulty on the BTC network goes through an automatic adjustment every 2,016 blocks (or roughly two weeks). Depending on the number of active miners putting their computational power to work on the blockchain, the adjustment could make it either easier or harder for them to complete the work and get rewarded.
It’s a feature that enables the system to self-sustain in relation to external events affecting its performance.
After the latest such adjustment that took place over the weekend, the mining difficulty increased to a record high of over 20.6 trillion. This is the first time in over twelve years of BTC history that the metric has expanded above 20 trillion.
This represents a significant rise in the mining difficulty of over 20% since November 3rd, when it dropped to 16.8 trillion after reports emerged that miners have migrated out of China’s Sichuan province.
The rule of thumb suggests that the mining difficulty increases when there’re many miners on the network. Data from blockchain.com confirms this, showing that the hash rate has also reached a new all-time high of nearly 150,000,000 TH/s.
Compared to the events in early November when it dropped to 106 million, this is a massive increase of over 40%.
While the network’s fundamentals continue to increase towards new highs, the asset price went to a vicious correction in the past 24 hours.
BTC was hovering above $40,000 just yesterday before it headed south to an intraday low of slightly above $30,000. Although, the bulls recovered some of the losses from this near $12,000 price drop.
Nevertheless, the primary cryptocurrency is well in the green since the start of 2021. BTC entered the new year at $29,500 and is still about 10% higher now, despite the recent developments.
