Bitcoin Mining Difficulty Increasing, So What Does It Mean?

A very good start to 2023 bitcoinAlthough , it makes gains in price, the situation is not very good for miners. According to data from BTC.com, the mining difficulty has reached a new high of 37.95T.

Bitcoin mining difficulty refers to the difficulty of miners to find the right hash for each block. Thus, the increase in this value indicates increasing difficulties in verifying transactions and adding new blocks to the chain.

Bitcoin Mining Is Getting Harder

Koinfinans.com As we reported, Bitcoin registered a new high with a 10.26% increase, according to data shared by Blockchain data providers. On the other hand, the mining tuning took place at a block height of 772,128 and a hashrate rate of 271.33 ExaHash per second (EH/s).

Hashrate is the amount of computing power required to mine new blocks. As the hash rate has also increased, it is a harbinger of increased efforts by Bitcoin miners to ensure that no malicious action is involved in the network.

As mining has become more difficult, “mining” rates have also been affected. According to Glassnode, the Puell indicator had risen to 0.692 at the time of writing. This metric defines the ratio of daily coin issuance per miner profitability to the 365-day moving average.

However, the current value means that the Puell indicator is relatively high compared to its recent trend. Therefore, there was a possibility that miners would liquidate their coffers, and thus selling pressure could act. This contrasts with miners’ positions a few weeks ago, when they added new BTC to their reserves.

glassnode bitcoin index

CryptoQuant analyst Crypto Season has revealed that before the recent spike, the mining difficulty decreased by almost 10%. The analyst went further, noting that miners may have anticipated the increased difficulty and braced themselves because of the Miner Position Index (MPI).

While the news was being prepared, MPI was also showing a very high value. An increase in MPI indicates the possibility of selling more than normal. The reserves of the miners decreased to 1,842 million. This means that there may be a decrease in price.

Bitcoin price chart

While this may upset investors, Crypto Season highlighted that this possibility is being tackled.

“If there is enough demand, it won’t be a big deal. However, when we consider all short liquidations and now everyone is taking long bets. Maybe it won’t be that easy.”

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