Bitcoin mining difficulty has once again spiked to a new all-time high (ATH) after climbing by a significant 3.6%. This spike occurred after the sector registered moving average hash rate levels for a record seven days over the weekend. The difficulty experienced by miners has sparked speculation in the broader crypto space.
Decline in miner revenues amid rising costs
As noted by Ali Martinez, an on-chain analyst on X, Bitcoin miners have sold over 30,000 BTC within the last 72 hours. Martinez values the Bitcoin sold at about $1.71 billion. Martinez’s post suggests a couple of things could have triggered such massive sales quickly.
#Bitcoin miners have sold over 30,000 $BTC in the last 72 hours, worth around $1.71 billion! pic.twitter.com/OuaiIo7QZ9
— Ali (@ali_charts) September 11, 2024
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For context, Bitcoin miners include individuals or entities that utilize computational power to validate transactions on the Bitcoin blockchain. They are rewarded with newly minted Bitcoin. Therefore, when miners sell their earned assets, it indicates a need to cover operational costs, such as equipment expenses and electricity costs.
According to Mempool, miners' current difficulty adjustment level came at a block height of 860,832. This took the ATH from 90.67 trillion set earlier in July to a new peak of 92.67 trillion.
Meanwhile, Bitcoin miners’ revenue dropped after the April 20 halving event, which reduced rewards from 6.25 BTC to 3.125 BTC. This revenue dropped from $72.4 million to $25 million and $30 million, according to a seven-day moving average of 550.25 EH/s, as of the end of June.
The increasing mining cost and dwindling revenue have pushed some unable-to-compare miners out of the market. As reported by U.Today, Bitcoin’s price has to stay between $65,000 and $70,000 for mining to remain economically sustainable.
Potential implications for Bitcoin’s price
Some have suggested that Ali Martinez’s data may include miners liquidating their holdings for financial reasons. Others have expressed worry that such a large volume at a time when bearish winds were still hitting the crypto market could trigger selling pressure and a potential drop in Bitcoin's price.
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On the other hand, the effect of mining difficulty on the BTC price could be positive, as it signals that the network is more secure and boosts investors’ confidence.
At the time of writing, data shows Bitcoin traded for $55,689.03, a 2.13% drop in price in the last 24 hours. The Bitcoin community's bullish sentiments have also dropped to 21% out of 51,341 people sampled.
