Bitcoin’s difficulty registers biggest increase in 3 months: are miners bullish?
The average amount of Bitcoins sold by miners continues to gradually decline
According to data from BTC.com, Bitcoin (BTC) mining difficulty will increase by around 11% on January 9. This is the biggest increase in almost four months, taking the benchmark above 20 trillion for the first time ever.
„The hash rate is skyrocketing!“ commented well-known Bitcoin trader pseudonym Hodlonaut three days ago. „When the difficulty is adjusted in three days, it will exceed 20 trillion for the first time in Bitcoin’s history.“
Bitcoin’s network difficulty reaches 20 trillion
The network difficulty is a relative measure of how difficult it is to mine a new block for Bitcoin’s blockchain.
With the hash rate currently at record levels of around 148 EH/s, the difficulty adjustment, which occurs every 2016 blocks, ensures that the time between mined blocks remains close by Crypto Profit to 10 minutes on average.
Miners remain bullish
The simultaneous growth in hash rates and mining difficulties suggests that miners continue to allocate record resources to protect and invest in the network.
Since the halving of May, average total BTC outflows from miners have gradually decreased. Hence, miners still show no signs of major sales despite Bitcoin’s price soaring above $41,000 in recent days.
Furthermore, the Miners Position Index (MPI), which calculates the ratio of BTC outflows from miners‘ wallets to their 1-year moving average, is currently at 4.5. Values above 2 indicate that most miners are expected to sell.
This suggests that miners have no intention of parting with their newly mined BTCs at the moment, especially as BTC stocks on exchanges collapse and the price tracks a strong upward trend ever faster.
So, to some miners it may seem advantageous to hold on to their inventory and take advantage of the ongoing bull market that could last until December 2021, according to some forecasts.
Meanwhile, concerns of a „mining death spiral“ continue to be debunked with each new network record, while Bitcoin’s fundamentals are stronger than ever. Overall, Bitcoin miners appear to be in a financially secure position thanks to the rising price of BTC, despite the fact that it has never been more difficult to mine the cryptocurrency.
Currently, mining a block of BTC is worth approximately $253,600, with about 9.44% of that coming from the network’s transaction costs, according to the latest data from Clarkmoody.