Bitcoin fundamentals diverge from BTC price dip as difficulty hits new all-time high
Bitcoin (BTC) may have tanked to six-month lows this week, but under the hood, the network is now verifiably stronger than ever.
Data from on-chain monitoring resources including Glassnode and BTC.com confirms that as of Friday, the Bitcoin network difficulty is at a new all-time high.
The difficulty, which expresses how much miners need to work to solve the equations to process transactions on the blockchain, is arguably the most important of fundamental Bitcoin network components.
The metric automatically adjusts to increase or decrease mining effort according to miner participation — the more competition among miners, the higher the difficulty.
This has the effect of keeping mining stable regardless of factors such as sentiment, price or unintended incidents.
After dipping in mid-2021, difficulty took the rest of the year to bounce back, with the latest automated readjustment adding 9.32% to the previous level. With that, it entered unexplored territory above 26 trillion.
Commenting on the event, cryptocurrency journalist and commentator Colin Wu noted that the increase is the highest in over half a year, with BTC.com data confirming that late August saw the last adjustment of more than 10%.
The difficulty thus logically followed hash rate higher, this having continually set new record highs last year.
Related: Breaking ‘bear market’ in Bitcoin demand will spark next BTC price surge — Analysts
Hash rate, an estimate of the processing power dedicated to the blockchain by miners, currently sits at 192 exahashes per second (EH/s), having briefly reached 218 EH/s on Jan. 10, according to MiningPoolStats.
As Cointelegraph often reports, an old mantra among age-old hodlers is that "price follows hash rate," this trend nonetheless
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