Key Points
- Bitcoin’s temporary fall below $50,000 has led to profitability concerns for miners.
- Despite bearish price movements, Bitcoin’s global network hashrate remained relatively steady.
Bitcoin’s struggle to recover above the $60,000 mark has led to a challenging situation for miners. The cryptocurrency’s temporary fall below $50,000 on August 5 has triggered profitability issues across the industry, according to analysts at Hashrate Index.
Decline in Hashprice Metric
In a blog post, Hashrate Index analyst Kaan Farahani pointed out that Bitcoin’s drop to $55,000 resulted in a significant decrease in the hashprice metric. This metric fell by 28% on a weekly basis, placing stress on miner profitability.
Despite the bearish price movements, Farahani observed that the global network hashrate of Bitcoin remained relatively steady throughout the week. The 7-day simple moving average network hashrate only decreased by approximately 1%, from 644 EH/s to 638 EH/s.
Lower Seasonal Hashrate Volatility Expected
This modest reaction could signal a move towards lower seasonal hashrate volatility in the upcoming weeks to months. This expectation comes as energy curtailment programs for hot summer months are expected to wind down.
The slight decline in hashrate resulted in an average block time of about 10 minutes and 12 seconds throughout the week. Hashrate Index analysts predict a slight decrease in mining difficulty of around 2% for the upcoming adjustment on August 14.
As Bitcoin struggles to break above $56,000, some analysts do not rule out further declines. Despite a rebound from $49,000, analysts from CryptoQuant warn that breaking below the $57,000 support level could lead to a possible drop to $40,000. This leaves investors uncertain about Bitcoin’s next move.
A further decline in Bitcoin’s price could intensify the pressure on shares of crypto mining companies. These companies have already seen significant drops amid market chaos in Asia. Data from Hashrate Index shows that among 12 publicly traded Bitcoin mining companies, the average decline over the past week was 21%. Bitdeer experienced the largest drop at 28.59%, while Iris Energy managed to limit its losses to a 12.31% decline.
