On-chain data shows that the Bitcoin Hashrate has continued to decline, with its 7-day average value reaching a low not seen since early September.
Bitcoin hashrate has fallen
The Bitcoin “Hashrate” refers to a measure of the total amount of computing power that miners as a whole have connected to the network. It is indicated in units of hashes per second (H/s) or, more practically, in exahashes per second (EH/s). This indicator can be useful to assess the feeling shared by minors. The growth of the Hashrate network may signal that this cohort is either reacting to a period of profitability or growing in anticipation of future price action. On the other hand, a decline may signal weakening sentiment.
As the chart below from Blockchain.com shows, the 7-day average value of the Bitcoin Hashrate has followed the latter type of trajectory in recent months.
The trend in the 7-day average value of the indicator over the last 12 months | Source: Blockchain.com
Hashrate reached a new all-time high (ATH) in mid-October, but miners took out power as the cryptocurrency’s price went through its bearish turn during that month. Recently, BTC has shown some recovery, but this does not seem to have changed the opinion of miners, as the value of the metric has only gone down.
Currently, the 7-day average Bitcoin hash rate stands at 978.8 EH/s, which is the lowest level since the first half of September. The recent lows are about to affect another BTC network-related metric: difficulty. Difficulty is a feature built into the blockchain that controls how difficult it is for miners to mine blocks. This metric automatically changes its value approximately every two weeks depending on how quickly miners have completed their task since the last adjustment.
Satoshi coded a simple rule that the network must follow: the block time must converge to 10 minutes. If miners take an average time faster than that to find a block, the chain increases its difficulty during the next adjustment. Likewise, a decrease occurs if validators are slower in their work.
As miners have reduced their computing power over the past few months, their pace has decreased and the network has adjusted the difficulty downward.
While the Hashrate decline has only recently continued, the network is once again moving towards another easing of difficulty, as data from CoinWarz suggests.
The details related to the upcoming Difficulty adjustment | Source: CoinWarz
Bitcoin’s average block time stands at 10.43 minutes since the last adjustment, which is significantly slower than the standard rate. As a result, the network is expected to reduce difficulty by 4.15%.
However, as the adjustment is still days away, this figure could change depending on whether miners expand or cease operations in the coming days.
BTC Price
At the time of writing, Bitcoin is floating around $93,000, up 2.5% over the past seven days.
Looks like the price of the coin has plummeted over the past day | Source: BTCUSDT on TradingView
Featured image of Dall-E, chart from TradingView.com
Editorial process as Bitcoinist focuses on providing thoroughly researched, accurate and unbiased content. We follow strict sourcing standards and every page undergoes careful review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance and value of our content to our readers.
