Bitcoin Network Undergoes Massive Mining Difficulty Adjustment

The Bitcoin network has just undergone a significant difficulty reduction and its most important since the beginning of the ASIC era. The network saw a 16.05% decline today, a much more significant figure than the widely-expected 10%. Glassnode, a data analytics company, announced that this is the second-largest negative difficulty adjustment in history.

Normally, the difficulty on the Bitcoin network undergoes an automatic change after every 2,016 blocks. This feature allows the system to be self-sufficient concerning influential external factors.

The difficulty is adjusted in tandem with the number of miners putting their computing power to use on the Bitcoin blockchain. As expected, the adjustment makes mining either more difficult or easier for miners depending on their numbers.

The recent end of the rainy season in China’s Sichuan province has forced miners to evacuate the region. This caused a significant drop in the Bitcoin hash rate. That said, the network automatically adjusted to provide more incentives for miners to keep mining.

Today’s adjustment occurred at block 655,200 and has taken down the difficulty from its all-time high of 20T to 16.79T. The record occurred in the October 2011 adjustment, which saw the Bitcoin mining difficulty drop by more than 18%.

Meanwhile, despite this being a significant development for the cryptocurrency’s network, BTC is yet to react to the news, and, likely, it wouldn’t in the coming hours and days.

Key BTC Levels to Watch in the Near-Term — November 3

BTC has traded identically to what we predicted in a previous analysis after it fell to the $13,362 support and bounced significantly. Apart from the strong support at that level, the presence of the base of our ascending channel also adds to the strength of the support at that line.

That said, BTC is currently on its way to retest the $14,101 YTD high. However, it first has to clear the $13,.866 resistance. The $13,866 level will be a tricky level to clear considering it has failed to do so on several occasions over the past few days.

Total market capital: $395.8 billion

Bitcoin market capital: $254 billion

Bitcoin dominance: 64.3%

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