U.Today – Mining difficulty has once again surged to a novel all-time high (ATH) after rising by a significant 3.6%. The spike comes after the sector saw moving average hash rate levels for a record seven days over the weekend. The difficulties experienced by miners have sparked speculation in the broader crypto space.
Miners’ revenues fall amid rising costs
As noted by Ali Martinez, an on-chain analyst at X, Bitcoin miners have sold more than 30,000 BTC in the past 72 hours. Martinez values the Bitcoin sold at around $1.71 billion. Martinez’s post suggests that several things could have quickly triggered such a massive sell-off.
For context, Bitcoin miners include individuals or entities that exploit computing power to validate transactions on the Bitcoin blockchain. They are rewarded with newly minted Bitcoins. Therefore, when miners sell their earned assets, it means they need to cover operating costs, such as hardware expenses and electricity costs.
According to Mempool, the current mining difficulty adjustment level for miners has reached 860,832 blocks. This has brought the ATH from 90.67 trillion reached earlier in July to a novel high of 92.67 trillion.
Meanwhile, Bitcoin miner revenues fell following the April 20 halving, which reduced rewards from 6.25 BTC to 3,125 BTC. That revenue fell from $72.4 million to $25 million and $30 million, in line with the seven-day moving average of 550.25 EH/s, at the end of June.
Rising mining costs and falling revenues have pushed some non-competitive miners out of the market. According to U.Today, the price of Bitcoin needs to stay between $65,000 and $70,000 for mining to remain economically sustainable.
Potential implications for Bitcoin price
Some have suggested that Ali Martinez’s data could include miners liquidating their holdings for financial reasons. Others have expressed concerns that such high volume at a time when bearish winds were still hitting the cryptocurrency market could trigger selling pressure and a potential drop in the price of Bitcoin.
On the other hand, the impact of mining difficulty on BTC price can be positive as it signals that the network is more secure and also increases investor confidence.
At the time of writing, the data shows that Bitcoin was trading at $55,689.03, down 2.13% in price over the past 24 hours. The bullishness of the Bitcoin community also dropped to 21% of the 51,341 people surveyed.
