Bitcoin (BTC) may face more downward price pressures this week as network complexity is set to be reduced to the maximum in just five months.
According to the BTC.com resource, the difficulty will be reduced by 8.3% with the next automatic adjustment in four days.
Difficulty repeating the transition in June
Mining difficulties are an important indicator of competition among miners for collective grants and, more generally, the overall health of the mining sector.
Meanwhile, automatic adjustments perform a more important function, allowing Bitcoin to maintain itself regardless of price action or other conditions.
The difficulty eased by 9.3% in June after an earlier decline of 6.3%, the latest announcement of the peak of unrest for miners after bitcoin block support was halved in May.
The cut in half cut block support by 50%, resulting in dramatically different profit dynamics for miners working with lower margins or with outdated hardware. Two subsequent cuts opened up opportunities for less efficient miners, after which the difficulty was corrected upwards by about 15%.
Meanwhile, last fall was associated with the end of the so-called “water season” for Chinese miners. This happens in October every year, when rainfall in Sichuan Province decreases and cheaper hydroelectricity dries up, causing costs to rise.
Final Bitcoin price barrier requirements
The throwing effect that occurred while Bitcoin tried and failed to overcome the $ 14,000 resistance for the first time in nearly 18 months could be a longer pullback than this important level.
According to Cointelegraph reports, there are hardly any technical resistance levels between $ 14,000 and the highest levels of full-time Bitcoin business at $ 20,000 since 2017.
Developer Matt Odell mentioned the operation on Twitter on Tuesday:
“The rainy season in China is over -> Energy prices for hydroelectric plants have gone up -> The rate of regret has decreased as miners switch to cheaper energy -> The blocks were mined less frequently until the difficulties changed.
Odell discussed another consequence of the decrease in mining activity – an increase in bitcoin transaction fees, which increased by nearly 200%.
After June, price action slowly ebbed in line with the difficulties and the fragmentation of the Bitcoin network. Then, when both accounts began to rise, the price returned to its own bounce, supporting the popular theory that price follows basic principles especially the retail frequency.
Downsizing, Bitcoin BTC Times CEO Lena Seche looked at the overall hash rate performance.
“#Bitcoin hash has grown by 18% since the third half, 9,300% since the second half, and 554,000,000% since the first half,” she tweeted this week.