U.Today – Mining difficulty has once again skyrocketed to a new all-time high (ATH) after climbing a significant 3.6%. This surge came after the sector recorded a record seven-day moving average hash rate levels over the weekend. The difficulty experienced by miners has sparked speculation in the broader crypto space.
Mining revenues decline amid rising costs
As pointed out by X blockchain analyst Ali Martinez, Bitcoin miners have sold over 30,000 BTC in the past 72 hours. Martinez values the Bitcoin sold at around $1.71 billion. Martinez’s post suggests that a couple of things could have quickly triggered such massive selling.
For context, Bitcoin miners include individuals or entities that use computing power to validate transactions on the Bitcoin blockchain. They are rewarded with newly minted Bitcoins. Therefore, when miners sell the assets they have earned, this indicates a need to cover operational costs, such as equipment expenses and electricity costs.
According to Mempool, the current miners’ difficulty adjustment level occurred at block 860,832. This brought the ATH from 90.67 trillion set in early July to a new peak of 92.67 trillion.
Meanwhile, Bitcoin miner revenue fell after the April 20 halving event, which reduced rewards from 6.25 BTC to 3.125 BTC. This revenue fell from $72.4 million to $25 million and $30 million, based on a seven-day moving average of 550.25 EH/s, by the end of June.
Rising mining costs and declining revenues have driven some miners who cannot compete with them out of the market. As U.Today reports, the price of Bitcoin needs to stay between $65,000 and $70,000 for mining to remain economically sustainable.
Possible implications for the price of Bitcoin
Some have suggested that Ali Martinez’s data may include miners liquidating their holdings for financial reasons. Others have expressed concern that such a large volume at a time when bearish winds were still sweeping through the cryptocurrency market could trigger selling pressure and a potential drop in Bitcoin’s price.
On the other hand, the effect of mining difficulty on the BTC price could be positive, as it indicates that the network is more secure and increases investor confidence.
At the time of writing, data shows Bitcoin was trading at $55,689.03, a 2.13% drop in price over the past 24 hours. Bullish sentiments in the Bitcoin community have also dropped to 21% of the 51,341 people sampled.
This article was originally published on U.Today
