Data from on-chain monitoring resource BTC.com confirms that Bitcoin’s network difficulties hit new all-time highs on Aug. 31.
Bitcoin seals biggest jump in difficulty since early 2022
Despite recent BTC price declines, Bitcoin network fundamentals tell a bullish story as August draws to a close.
Both difficulty and hash rate are increasing, reflecting miners’ belief in the long-term viability of their network participation. It also suggests that the mining sector is absorbing lower profits versus costs in the near term.
The difficulty, which increased by 9.26% when it was automatically rebalanced on August 31st, is now at its highest level ever. Competition among miners is as healthy as ever.
For comparison, the last time this difficulty increased more at once was in January (9.32%) and before that in August 2021 (13.24%).
According to BTC.com, the hash rate now averages 221 exahashes per second (EH/s), a hair below the highest average ever recorded of 223 EH/s just before Terra LUNA imploded in May.
Bitcoin (BTC) fundamentals have provided a “welcome uptrend” that research has said is taking the edge off a classic bear market.
“Personally, I think as more hash comes out of the US, we will see a new annual seasonal trend like we used to see in China. ie hot months lower hashrate/help stabilize net, cool months higher hashrate,” macro analyst Jason Deane wrote in part of a Twitter response to the difficulty readjustment.
Overview of the basics of the Bitcoin network (screenshot). Source: BTC.com
Bitcoin “barely holding out”
The figures provide a welcome counterpoint to choppy spot markets and gloomy forecasts for the remainder of 2022.
Related: BTC price spike warnings emerge as 10,000 BTC leaves wallet after 9 years
With BTC/USD down nearly 13% by the end of August, on-chain analytics firm Glassnode said a recovery in fundamentals would be a helpful antidote to an otherwise grim environment.
“It remains plausible that Bitcoin is in a bottoming area and historically would be similar to all past bear markets,” it concluded in the latest issue of its regular newsletter, The Week On-Chain, published Aug. 30 and entitled ” Bitcoin is barely holding out.”
“However, bitcoin prices are holding up and any improvement in fundamentals would be a welcome change.”
BTC/USD is circling $20,150 at the time of writing, having recovered from levels below $20,000 overnight, according to data from Cointelegraph Markets Pro and TradingView.
BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView
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