In recent months, the price of BTC has been dropping, with the flagship currency currently trading below $17K. Meanwhile, BTC’s hash rate has also declined recently.
BTC’s hash rate refers to the amount of computing and processing power provided to the system through mining. An on-chain data reveals that the hash rate has dropped by about 14% after hitting an ATH earlier in November.
The hash rate is currently 234 EH/s. However, the metric has lost about 11% in the last five days. Hashrateindex, an analytics platform, states that many lenders and miners dumping their mining machines could affect the ASIC market.
Besides, Bitcoin’s mining profitability has dropped since its price fell by over 50% from its ATH in 2021. There has been reduced demand for new mining hardware.
This low demand could affect the prices of used and new machines. Meanwhile, timing is critical in the crypto mining market.
Crypto miners who learn to evaluate trends enjoy profitable BTC mining. However, the crypto market can be hard to read at times.
Markets can be cyclical. Also, hash rate drops and bear markets are common in the crypto industry. According to reports, ASIC miner prices dropped by about 80% in November.
Also read:The current hash price (profitability) is at about $0.058, a new record low. The unit for measuring hash price is $/d/TH/s (dollars per day per terahash per second).
This hash price has dropped by over 84% compared to last November.
Upcoming 2024 BTC Halving Could Affect Mining Profitability
Meanwhile, the declining profitability has increased ASIC miners’ payback period. The payback period was about 12 months last November but has risen to an average of 27 months.
Another factor that will likely affect Bitcoin’s mining profitability is the upcoming halving in 2024. The halving will lead to the halving of block rewards.
Due to all of these variables acting against BTC miners, hardware prices are expected to dip soon. However, miners will start powering up their mining rigs once again whenever the hash rate and mining difficulty drop to a point where they can make a profit.
Furthermore, a long-term analytical indicator has shown a death cross due to the recent drop in the BTC hash rate. The hash ribbon, which gauges hash rate MA (moving averages), has recently entered capitulation territory after making a recent switch.
The last time something like this occurred was back in June, after the crypto market meltdown caused by the Terra Luna infection.
As per CoinGecko, Bitcoin is currently trading at the $16k region. Meanwhile, more hardware selling pressure from crypto miners could push BTC’s price even lower in the coming months.
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