Bitcoin Mining Difficulty Drops Amid Retail Accumulation
- Bitcoin mining difficulty saw a 1.49% pullback for the first time this year.
- The -1.49% adjustment breaks away from BTC’s six positive adjustment streak.
- While BTC’s price is still around the $40K mark, retail crowds are flocking back to the network.
After charting a full recovery since China’s mining ban last year, the Bitcoin mining difficulty has seen another drop after almost four months. Since November 2021, the Bitcoin (BTC) mining difficulty adjustment has gradually increased; however, it dropped by 1.49% on March 3.
Bitcoin Mining Difficulty Adjustment
Bitcoin mining difficulty measures how difficult it would be to mine a block on the BTC network. When more miners flock to the network, the mining difficulty increases, and difficulty declines when miners exit the network.
Approximately every two weeks or 2,016 confirmed blocks, the difficulty for mining a new block ‘adjusts’ based on the average of the last 2,016 blocks, making it easier or difficult to mine blocks.
In mid-February, the mining difficulty and hash rate hit all-time highs. The recent fall in difficulty saw the metric drop by 1.49% after six consecutive positive difficulty adjustments since November-end.
Notably, over the last two weeks, the average hash rate fell to 197.19 exahashes per second (EH/s), making the average block time exceed the 10-minute target at 10 minutes 9 seconds.
Thus, miners competing to solve the next valid block found it relatively easier to do so, resulting in the recent difficulty correction.
The difficulty adjustment saw different reactions from the crypto space. Well-known BTC miner Denver Bitcoin speculated whether the recent 1.49% correction ‘could be the only one for the year.’ He further noted that experts were still hopeful of a 300 EH/s average by December.
Retail Accumulation Begins
Apart from the recent negative difficulty adjustment, price-wise, the top asset oscillated at $40,884.23, noting a 3.77% drop in price. BTC’s short-term pullback in the recent days saw a return of retail investors to the Bitcoin landscape.
Notably, addresses holding at least 0.1 BTC made a new all-time high, while addresses containing at least one BTC were at a 10-month peak, as per data from Glassnode. The gradual rise in the addresses having at least one BTC highlighted an accumulation trend from retail crowds.
While the retail push is essential for BTC rallies, for now, retail euphoria hasn’t reached the levels spotted in 2017. Interestingly, in 2017 when the retail mania was on the rise, BTC’s price entered a bull run making a new price all-time high.
Notably, one of the darkest times for BTC mining was from May to July 2021, when China banned Bitcoin mining, causing a massive drop in the hash rate. Over the last year, however, the hash rate rose by 31% as countries like Kazakhstan and Canada picked up.