Bitcoin Remains Bearish as Mining Difficulty Adjustment Plummets

Bitcoin Remains Bearish as Mining Difficulty Adjustment Plummets

Bitcoin (BTC) has recorded yet another negative mining difficulty adjustment after dropping for the fourth consecutive time yesterday by about 5%. The latest adjustment brings the mining difficulty to its lowest point since January 2020.

This drop comes because of the ongoing mining facility clampdown in China over the past few weeks. With fewer computational power mining for Bitcoin, it means that fewer blocks will get added to the blockchain, thus affecting the balance of activities on the network.

Interestingly, the recent drop in BTC mining difficulty means that more rewards are going to miners still online. A Bitcoin mining engineer, Brandon Arvanaghi, explained in an interview with CNBC during the last difficulty adjustment that:

“This will be a revenue party for miners. They suddenly own a meaningfully larger piece of the pie, meaning they earn more bitcoin every day.”

Meanwhile, the BTC hashrate has regained a positive standing after falling below the 90m TH/s mark a few days ago. The BTC hashrate now rests around the 100m TH/s area at press time.

The hashrate jump indicates that many displaced Chinese miners have set up shop in more conducive jurisdictions and are slowly coming online. Already, governments across North America and Europe are working towards attracting miners with eye-popping incentives into their jurisdictions as the mining industry becomes heavily focused on using green and sustainable energy solutions.

Key Bitcoin Levels to Watch — July 18

Bitcoin reached a three-week low over the weekend around $31,000 as the crypto market remains under grave uncertainty from regulatory efforts and the GBTC unlocking slated for later today.

BTCUSD – Hourly Chart

Following a goodish bounce to the $32,500 level, the benchmark cryptocurrency suffered another correction. However, the decline got decent support from the hourly 50 SMA at the $31,700 area, where BTC currently trades. That said, bulls need to defend the $31,700 – $31,000 axis over the coming hours and days to prevent a fall to the $30,000 psychological support, as bearish market sentiment persists.

Meanwhile, our resistance levels are at $32,000, $33,000, and $33,750, and our key support levels are at $31,000, $30,000, and $29,000.

Total Market Capitalization: $1.3 trillion

Bitcoin Market Capitalization: $594.8 billion

Bitcoin Dominance: 45.6 %

Market Rank: #1

 

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.