Miner Weekly: Has bitcoin price bottomed?
Could bitcoin’s difficulty change be an indicator?
Several news outlets reported bitcoin’s difficulty drop this week, which was the largest decline since July 2021. Bloomberg spoke to some industry people who suggested the difficulty ease signals a bottom.
For what it’s worth, the latest difficult change was surprisingly close to the first major decline in 2018, which also happened around this time four years ago. And bitcoin’s price bottomed soon after that in December, although it stayed at the bottom range for the next three excruciating months.
In November 2018, about 600k ASIC miners were estimated to go offline within two weeks and many were even sold by the kilos in China. Now, Compute North filing for Chapter 11, Iris Energy defaulting on equipment loans and Core Scientific's warning of bankruptcy seem like today’s version of that.
Bitcoin’s difficulty change typically lags behind market events. But could it also be a leading indicator signaling the bottom? We made the chart above with a zoomed-out perspective superimposed with major market-moving events and a bitcoin price graph.
Maybe the worst is yet to come, maybe it has already passed. But enjoy the rebound of bitcoin’s hashprice, albeit a slight one, while you still can because even if we have bottomed, there might still be several excruciating months ahead before we can get out of the bottom range 🙂
For now, the average block interval in the current difficulty epoch is about 9 minutes and 13 seconds. If the hashrate remains steady for the next nine days or so, the difficulty is set to go up and the hashprice will drop again.
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