Mining difficulty for Bitcoin has declined below its previous levels for a fourth consecutive time since its first decline in May. BTC mining difficulty decline began with China’s ban on crypto mining in the country, leading to the massive exodus of Bitcoin miners. The latest decline is represented as 4.8%, according to available data.
Following the decline, it is now less difficult to mine the crypto asset. During periods like this, BTC becomes more appealing for miners to mine, especially for those with low hash rate and computational power. However, as miners struggle to mine Bitcoin following an initial drop, mining difficulty recovers, although it may not recover to the initial levels.
Mining Difficulty Rate Plunges by Half
The mining difficulty happened at block #691,488, bringing difficulty from a previous high of 14.4 trillion to 13.7 trillion, which is the lowest noted since late Q2, 2020. In comparison, the current rate is half of the rate recorded in May. After recording similar declines since May, mining difficulty experienced an abysmal 28% drop in early July. This was at the climax of miners’ migration out of China.
On-chain analytics, Glassnode reported last week that as Chinese Bitcoin miners relocated– leading to 50% of global Bitcoin miners being unable to mine– miners’ revenue still increased. From a $20 million revenue at the start of relocation, revenue surged to over $31 million. As earlier mentioned, as soon as mining difficulty drops, mining becomes attractive for miners, thereby pulling in massive revenue for them.
In a related development, Glassnoted noted in a subsequent report that Bitcoin accumulation by miners had resumed. In its report a week ago, Glassnode attributed this renewed accumulation to Chinese Bitcoin miners resuming mining operations in the regions they relocated to and also having successfully relocated their mining hardware to these regions. They reportedly relocated to regions such as Texas, Kazakhstan, Iran, Serbia, Canada where mining regulations are friendly and electricity costs are low.
Massive Transfers of Bitcoin from CEXs Reported
Moreover, while these events were ongoing, another on-chain analytics firm, Santiment also reported massive outflow of Bitcoin from crypto exchanges. In one of the transfers, over 7,000 BTC was withdrawn from Binance exchange to an unknown wallet. Coinbase, a leading cryptocurrency exchange, also declared a 1000 BTC transfer from one of its custodial wallets to a cold wallet. Several other transfers have occurred at different periods as well since July.
Meanwhile, the expectations are high for where the price of Bitcoin will settle if a selling pressure follows after Grayscale’s Bitcoin Trust unlock. According to reports, the unlocking is scheduled for this week. In view of this, experts at JPMorgan have predicted a $25k bottom for the crypto asset. It once touched $28k support. Since last week, Bitcoin has been ranging between $31k and $33k after losing over 50% of its $64k ATH in mid-May. A rally is expected in the coming months.