Bitcoin mining difficulty has been rising for over a year now, and the metric doesn’t appear to be showing signs of ending. The latest difficulty adjustment for Bitcoin mining has brought it to a new all-time high (ATH). But more interestingly, mining difficulty is expected to jump again by double digits in the coming weeks.
Bitcoin mining difficulty hits new high
As more and more mining machines come online, it’s no surprise that Bitcoin mining difficulty continues to rise. This was evidenced by the most recent difficulty adjustment that occurred on Tuesday, August 22nd. This time, the difficulty rose again by 6.17% from the previous week, setting a record high for this indicator.
Bitcoin difficulty jumped to 55.62T, an all-time high, according to mining tracker CoinWarz. Not only does this represent a 6.17% gain on the weekly chart, but it also represents a 30-day gain of 3.17% and a 90-day gain of 12.25%, the site notes. In the last day alone, the mining difficulty increased by 2.55%.
Mining difficulty hits new all-time high | Source: CoinWarz
The adjustment of Bitcoin mining difficulty is very important to maintain the stability of block generation. This way, no matter how many mining rigs come online, the network will continue to produce blocks at a near-uniform rate, making them harder to detect.
Interestingly, although mining difficulty has risen significantly, it is expected to continue to rise. CoinWarz predicts that the next difficulty adjustment is expected to take place on Monday, September 4th, and the difficulty will increase by another 13.42%. If this happens, then the mining difficulty will hit an all-time high of 63.09T.
Will Rising Difficulty Trigger BTC Rally?
While an increase in Bitcoin mining difficulty is positive for the network, the likelihood of it translating into an increase in the price of Bitcoin is not high. This is because, as mentioned above, mining difficulty helps keep the number of blocks mined steady as mining activity grows.
In this case, mining difficulty is related to the security of the current Bitcoin network. This means transactions are more secure than ever, with Coinwarz noting that the network is currently 1.18 minutes faster than expected.
However, the indicator is not completely ruled out when it comes to price action, as while it may not trigger price action, it can certainly act as a supportive factor. Keeping the number of blocks mined constant every 10 minutes means regulating the amount of BTC entering circulation to ensure that supply does not exceed demand.
For now, Bitcoin is still suffering from last week’s price crash. The bulls are currently struggling to establish a strong support level at $26,000 that could serve as a rebound point for the recovery.
BTC price declines to $25,847 | Source: BTCUSD on Tradingview.com
