On July 13, 2020, the difficulty of mining BTC reached a new ATH of 17.39 trillion. This means an increase of 9.89% over the previous record of July 1, amounting to 15.78 trillion.
The new record suggests that more miners have joined the network in recent weeks, resulting in an increase in the average 14-day hashrateu, followed by an increase in mining difficulties.
Although since the beginning of July, the BTC price has consolidated in a narrow range of $ 9,100 to 9,500, it seems that increased computing power is used to mine the most popular cryptocurrency.
Are Chinese miners responsible for the new ATH?
During the last halving, miners experienced a nearly 50 percent drop in revenues in just one night. As a result, miners who had equipment with a lower level of performance stopped their operations due to too high costs.
When fewer miners extract BTC, the Bitcoin network automatically reduces the difficulty of mining. Because miners use computing power, after reducing the difficulty, large mines can usually extract more BTC.
Over the past few months, the bitcoin network has experienced two difficulty corrections, which has allowed large mines to achieve higher profits in a short period of time.
Lower mining difficulty benefited mainly miners from Sichuan, China, where electricity costs around $ 0.03 per kilowatt hour, due to the rainy season and the large number of hydropower plants.
Chinese miners have revealed that the breakeven point is currently between 5,000 and 6,000 dollars at such electricity prices.
According to Dmitry Ushakov, BitRiver commercial director, the low cost of electricity, combined with China’s rapid response to the Covid-19 crisis, has caused a rapid increase in the number of excavators connected to the network by Chinese miners.
Due to this increased activity, miners are currently facing the highest mining difficulty in bitcoin history.
Bitcoin price catalysts
Considering ATH mining difficulties, $ 0.03 / kWh in China, and the fact that newer, more efficient mining equipment is connected to the network, the cost of mining 1 BTC is low, and continues to profit most miners.
Given the fact that the cost of mining bitcoin in large mines can be as high as $ 5,000, miners will sell their BTC to cover operating costs rather than BREED.
Moreover, today’s historical increase in difficulty may have a domino effect in terms of cost increases. This could theoretically lead miners to sell to protect profitability.
Sales pressure, bitcoin, which cannot break through the resistance zone of 10,000 dollars and a smaller number of sellers on the market, create a high probability of another short-term correction.