According to data provided by BTC.com, Bitcoin’s mining difficulty has declined by 2.35% over the past two weeks, which marks the second biggest negative adjustment since the start of 2022.
Mining difficulty updates roughly every two weeks to adjust the pace of block production.
Overall, Bitcoin has now recorded a total of five negative adjustments this year.
Mining difficulty tends to decline dramatically during major market downturns. Miners, who are no longer able to turn a profit or even break even, are forced to switch off their equipment. For instance, Bitcoin's mining difficulty plunged by more than 15% during the coldest days of the crypto winter of 2018 amid the mass exodus of miners.
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However, the metric managed to recover and ended up reaching a new all-time high in January. In early May, Bitcoin's mining difficulty peaked as high as 31.25 trillion on the cusp of a significant market correction.
Bitcoin is currently trading at just $20,400, shedding more than 55% of its value since the start of the year.
According to data provided by Arcane Research, Bitcoin mining firms sold all of the coins they produced in May, which reflects their bearish sentiment.
Miners remain among the most influential market participants due to their vast holdings. Hence, many fear that they may exacerbate the current sell-off.
Alex Dovbnya
Caroline Amosun
Godfrey Benjamin
Tomiwabold Olajide