The current bitcoin mining difficulty is copying its $3,100 bear market behaviour. That was a significant move that set the stage for a bull run to $14,000. The flagship token now looks like it did at the bear market bottom of 2018. One of the fundamentals is about to repeat a move that has just happened twice in its history.
Looking at an analysis of the Bitcoin network difficulty after the latest adjustment on June 4 shows significant similarity to when BTC traded at the levels of $3,100.
BTC Difficulty Looks To Revisit History
The difficulty adjusted down by around 9.3% this week. That followed a downward shift two weeks previously of -6%. In the case that the next adjustment is also negative, it is currently forecast at -7%. It will only be the third time ever that three back-to-back negative adjustments have happened.
Except for December 2018, the only other time that Bitcoin recorded eight consecutive downward adjustments from 2011. The phenomenon repeating once more might well be highly significant. The difficulty in mining offers an estimate of miner interest, and taking it down incentivizes participation in Bitcoin transaction validation.
Adjustments are also critical to ensure Bitcoin’s status as ‘hard’ money. These changes in difficulty are automatic after every 2016 blocks mined. That enables Bitcoin to regulate itself predictably without compromising security.
Bitcoin Finally Works Like It Was Intended To Do
This year, the situation appears complicated, coming a few weeks after Bitcoin’s third block subsidy halving event. The halving slashed miner revenue by 50%. According to previous reports, the sell-offs from mining pools continued afterward, with miners selling more coins than they earned.
However, a famous commentator WhalePanda, said that the current behaviour shows that it is business as usual for Bitcoin. He tweeted:
“3 weeks after the #Bitcoin halving the mempool is almost empty again, 1 sat transactions confirming. There is no mining death spiral, even though we lost nearly 50% of the hash rate, it’s bouncing back, and the next difficulty adjustment is less than 10%. Bitcoin working like it was designed to.”
The lower difficulty is expected to boost the hash rate as more miners increase participation. The hash rate has already been rising after its halving drop, and a conventional theory suggests that price action follows hash rate upticks.
Just three months after its December 2018 lows, BTC/USD started a bull run that peaked at almost $14,000. In 2019, a new metric alleged that Bitcoin should top out at 1,000% of its 2018 difficulty low.