June 4, 2023

Bitcoin (BTC) may have hit a six-week low below $20,000, but its network fundamentals are anything but bearish.

The latest on-chain data shows that far from capitulation, hashrate and difficulty are growing rapidly.

Data supports “doozy” difficulty jumps

Despite being down around 7% in a week, BTC/USD hasn’t put off miners, who have recently exited their multi-month capitulation phase.

Now, with hardware and competition back online, the underlying metrics are firmly in “up only” mode as August draws to a close.

Difficulty neatly captures this — among other things, the size of the competition among miners for block subsidies — which is expected to increase by 6.8% next week.

According to the data of monitoring resources on the chain Bitcoin Networkwhich will be the highest difficulty adjustment since January this year.

Not only that, but if the 6.8% gain materializes, the difficulty will jump to an all-time high.

Bitcoin mining consultancy Blocksbridge predicted in the latest issue of its regular newsletter: “We may see difficulty big enough to set a new (or near-new) ATH in a few days,”Miners Weekly”, published August 27.

Nonetheless, Blocksbridge noted that the current climate is not easy for all network participants. For example, those with older equipment are feeling the pinch due to the loss of spot prices and the fall in the equivalent value of bulk subsidies and fees to costs such as electricity.

“Long story short, the bear market is really crashing the people who have inefficient mining fleets,” it continued.

Bitcoin mining overview (screenshot). Source: BTC.com

Hash rate rebounds to new all-time high

Going back to the more bullish numbers, Bitcoin’s hash rate appears to be replicating the difficulty to re-drive new all-time highs.

Related: Still growing – Armenian mining operator adds power plant capacity

According to the estimated data from the monitoring site Mining Pool Statisticsas of Aug. 22, the hash rate is as high as 246 exahashes per second (EH/s), just inches from the all-time high of 251 EH/s measured in late April.

Hash rate is always an estimate, and fluctuations in its value do not imply a direct increase or decrease in miner activity.

Bitcoin estimated hash rate chart (screenshot). Source: MiningPoolStats

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk and you should do your own research when making a decision.