Bitcoin mining difficulty got adjusted to the second-lowest value ever in history since 2011
The negative adjustment is considered as the most uncommon and reportedly impact on the Bitcoin price
The similar downward adjustment which occurred in March 2020, slashed BTC price nearly 50%
The bitcoin mining difficulty which showcases the difficulty level of solving the blocks on the network has been adjusted negatively. According to the report by on-chain market analyst Glassnode, the mining difficulty has been adjusted by -16%.
The mining difficulty gets adjusted automatically every 2016 blocks or approximately every 2 weeks. The positive adjustments are most common but the negative adjustment which eases the difficulty is considered a rare event.
With the huge swing in the BTC price, the hash rate, which indicates the mining power also shoots up. Therefore the mining difficulty is adjusted upwards to make mining more challenging. Conversely, if the hash rate drops, the difficulty level also drops which makes mining easier.
The main reason cited for the decrease in the difficulty level is said to be the Chinese miners who just shut off their mining-rigs with the end of the monsoon season. The immense hydro-electric power kept the mining process at a low cost and now with the end, the miners have shut off their systems.
What’s waiting for Bitcoin in the coming days?
The similar event occurred in the month of March 2020, wherein the mining difficulty was adjusted to -15.6%. In the wake of this event, the BTC price plunged nearly 50% pulling down the price surrounding $4000.
At the press time, BTC price is $13,551 with an increase of 1.31 percent and remains unaffected at present. However, the miners are expected to come online within a few days to restart the mining process with additional machines.
These miners may have an added advantage of the low difficulty level with high profits as the Bitcoin price is high comparatively. The next difficulty level is all set to get adjusted on November 15, 2020, and the current phase would be more important for Bitcoin.