Surprisingly, in spite of the recent Bitcoin price dip, miners seem to be steadfast unperturbed. Network fundamentals did not parallel the bearish BTC price actions this week. On-chain data confirms that the difficulty of mining has hit an all-time high, together with the hash rate that is not far behind.
So evidently, the downturn in the BTC/USD dropping 10% last week did not overly concern Bitcoin miners. They take these unfavourable market circumstances in stride, and this was attested in network activity on Aug. 22. The difficulty of Bitcoin mining increased by a 6.17% at its latest biweekly automated readjustment. Bidirectional implications cascade from this uptick – it not only pushed the difficulty to new record highs but also marked sixth largest difficulty uptick of 2023.
Difficulty is the mirror that reflects both miner competition and Bitcoin network security. Look closer, and it reveals that miners aren’t buckling under pressure when it comes to profitability, inspite of the market headwinds. The cherry on top is that the upward trajectory is poised to continue unabated, pushing the difficulty above the 56 trillion mark for the first time.
Now, when it comes to hash rate, a similar narrative unfolds. The hash rate, which is essentially the estimated hashing deployment by miners to the Bitcoin blockchain, is already challenging existing all-time highs of over 400 exa hashes per second (EH/s). Take this data and it speaks volumes about the high confidence in the security and reliability among the network participants.
Contradictorily, while the prices of BTC and ETH fell by -10%, network security and reliability has seen an upswing. Despite the BTC/USD price fall, there was a significant uptick in the figures which reaffirms growing miner activity in BTC mining. The ETH staking rate (%) also increased even though the price fell. This lopsided equilibrium, where the price falls amidst rising intrinsic value, signals an undervalued market and a compelling opportunity to accumulate.
In terms of the amount of BTC held by mining entities, the changes are relatively unnoticeable. Data on Aug. 22 shows that the balance chart stood at just over 1.83 million BTC, an increment of a steady 0.08% since the beginning of the month.
In conclusion, the resiliency of the Bitcoin network fundamentals projecting its defiance against the bearish BTC price action brings us to question – is the recent price dip an indication of market volatility, or does it bring to light an enticing opportunity to invest further in Bitcoin, given its robust network fundamentals? This paints a rather complex picture of the BTC market that informs and challenges investor strategies alike.
Source: Cointelegraph
