Bitcoin, the leading cryptocurrency by market capitalization, has seen a significant drop in its network hashrate in the past 2 weeks. On Saturday, July 3rd, the network’s mining difficulty dropped almost 28%, the largest amount in history.

Difficulty REMOVEitcoin falls almost 28%

Bitcoin mining difficulty was estimated to be down 27.94% on Saturday at a block height of 689,472, the largest in its history. This is due to the ongoing exodus of miners from China, which resulted in a subsequent drop in the hash rate.

In a variety of tweets On July 2, Chief Investment Officer Timothy Peterson cited the relationship between Bitcoin price and hashrate as controversial evidence that the decline was not over.

Average bitcoin network hashrate for 7 days. Source: Blockchain.com

For active miners, the decline will be a profit booster because when the mining difficulty on the network is less, it will be much easier for Bitcoin miners to find blocks. The constant increase in the difficulty level along with the hashrate means that hackers have to expend a lot of resources to attack the system.

It is expected that the miners in the field will not fully return for several months. During this time, the level of difficulty will likely increase again as the hashrate increases.

The biggest drop in difficulty in BTC’s life so far occurred on October 30, 2011, the day before Halloween.

Record Difficulties in Bitcoin History

Back then, the difficulty dropped 18.03% with a BTC block height of 151,200 when the global hashrate was only 8.61 terahash per second (TH / s). For comparison: The current next generation Bitcoin miner from Microbt or Bitmain has a hash power of around 100 TH / s.

Interestingly, the level of difficulty did not decrease as much as in 2011 until a block height of 655,200 was recorded on November 3rd, 2020. At that time last year, the mining difficulty dropped 16.05% and the hashrate was around 120.12 EH / s.

Typically, the BTC difficulty level increases more than it decreases during its lifespan. With a Bitcoin block height of 685,440, BTC’s mining difficulty dropped 15.97% on May 29, 2021 when the hashrate was around 150 EH / s.

There is a classic mantra among Bitcoiners that “price follows hashrate” – but if that’s true, a phenomenal chart pattern paints a sobering picture of future price behavior.

Peterson notes that the relationship between price and hashrate is “a go-ahead” when it comes to marking macro price highs.

An accompanying graph shows the peaks in 2013 and 2017, which correspond to the peaks held throughout the halving cycle.

2021 looks similar, but since the capitulation in May the ratio has tended towards 1 – the point at which the Bitcoin price is said to have completely “corrected” itself.

“Based on the current trend at P (h), this bubble will collapse on October 31st,” summarizes Peterson.

Source: Timothy Peterson / Twitter

The block time is expected to decrease to average and the hashrate to increase

With the current hashrate of 86.5 EH / s and a difficulty level of 19.93 trillion, the average block time is 10 minutes longer. After the Bitcoin difficulty level changes tonight, the time between blocks will return to an average of almost 10 minutes.

Since June 29th, the BTC hashrate has risen sharply as the 30-day hashrate statistic shows that the network’s hash power was only 66 EH / s on that day. Not only will this change in difficulty be a major milestone, but it will also make it a lot easier for miners to keep increasing their resources.

Bitcoin hashrate | Source: Coin black

Minh Anh

According to News Bitcoin

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