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Bitcoin (BTC) is currently facing drawdowns in multiple metrics, with on-chain data showing a significant crash in its mining difficulty. Per an insight from CryptoQuant analyst J.A Maartunn, the Bitcoin mining difficulty is down 11.16% following the latest network adjustment.
Bitcoin's hash value faces reset
Specifically, the analyst said this Bitcoin mining difficulty drawdown is the largest negative adjustment since July 2021. For reference, this was when the China mining ban was implemented, preceding a major market crash.
Notably, this mining reset also marked the 10th biggest downward difficulty adjustment in Bitcoin’s history. This is described as a major reset in hash power dynamics.
By implication, this reset means it is now easier to mine one Bitcoin block. However, this comes with a major security challenge, as it also implies the network is less secure.
This Bitcoin hashrate adjustment is one of the metrics around Bitcoin that validates the emergence of a bear market.
As of writing time, the price of the coin is down by 46% from its all-time high (ATH) of $126,198.07. But it has rallied by 1.45% in the past 24 hours to $68,334.21.
Bullish reset incoming?
Over the past decade, a massive crash in some of the most visible BTC metrics has always been accompanied by a gradual but confirmed rebound.
With indicators like the Fear & Greed Index also dropping to levels not seen since the FTX crash, the market is probably at its worst point in history.
Judging by its previous price, the price of Bitcoin may start its recovery from this point, backed by the oversold Relative Strength Index (RSI). One crucial catalyst under watch is the growing BTC accumulation from Strategy and other top treasury companies.
While critics like Peter Schiff see BTC price falling to $10,000, proponents like Samson Mow still maintain a million-dollar target.
Vladislav Sopov
Dan Burgin