BTC price action is causing some to panic, but Bitcoin miner confidence in the network is there for all to see.
Bitcoin network fundamentals are in no mood to follow bearish BTC price action this week.
The latest on-chain data confirms that difficulty has hit new all-time highs, with hash rate not far behind.
Bitcoin mining difficulty ends slump
Despite BTC/USD dropping 10% last week, Bitcoin miners appear to be taking the price downturn in their stride.
This was cemented in network activity on Aug. 22, as difficulty increased by 6.17% at its latest biweekly automated readjustment.
Not only was this enough to take difficulty to new record highs, but it also marked Bitcoin’s sixth-largest difficulty uptick of 2023, figures from monitoring resource BTC.com show.
Difficulty is a reflection of both miner competition and Bitcoin network security, and its upward trajectory suggests that miners are not yet struggling when it comes to profitability.
The next automated readjustment is already due to continue the trend, taking difficulty over 56 trillion for the first time.
Hash rate shows “high confidence” in BTC
A similar story concerns hash rate — the estimated hashing deployment by miners to the Bitcoin blockchain.
While not possible to calculate exactly, depending on the source, hash rate is already challenging existing all-time highs of over 400 exahashes per second (EH/s).
Responding to the data, MAC_D, a contributor to on-chain analytics platform CryptoQuant, referenced “high confidence in the security and reliability” among network participants for both Bitcoin and the largest altcoin Ether.
“Recently, the prices of BTC and ETH have fallen by -10%. However, the network security and reliability have increased. First, the BTC hashrate (SMA 14) shows higher figures during the decline, which shows that miners are more active in BTC mining. Second, the ETH staking rate (%) shows that more ETH has been staked even though the price has fallen,” he wrote in a Quicktake market update on Aug. 22.
“This means that investors have high confidence in the security and reliability of the BTC and ETH networks. The fact that the price has fallen despite the increase in the intrinsic value of the two assets means that they are undervalued, and it can be considered a time to actively accumulate assets.”
Separate data from on-chain analytics firm Glassnode shows little tangible change in the amount of BTC held by mining entities.
This stood at just over 1.83 million BTC as of Aug. 22, up by a steady 0.08% since the start of the month.