The difficulty of Bitcoin mining has reached a new all-time high of 114.7 trillion (T) following a 5.6% upward adjustment over the weekend, according to data from CoinWarz. This increase is directly related to the rise in the hash rate, which recorded an all-time high on February 4.
In parallel, the Hash Ribbon indicator suggests that we are witnessing a period of mining capitulation, a phenomenon that occurs when operational costs exceed miners' profitability, leading them to shut down operations or reduce their activity. According to data from Glassnode, this capitulation phase began in early February, coinciding with a 4% drop in the price of Bitcoin so far this month.
Historically, miner capitulation has been associated with the formation of local lows in the price of Bitcoin. The last signal of this kind occurred in October 2024, preceding a bullish rally of 50%. If this pattern repeats, the market may be approaching a floor around $91,000 before a possible rebound.
The adjustment in mining difficulty, which occurs every 2,016 blocks, aims to maintain an average time of 10 minutes per block. However, as difficulty increases, mining becomes more demanding, putting pressure on companies in the sector. Proof of this is that, in January, Riot Platforms (RIOT) was the only large-scale public miner that managed to increase its production compared to the previous month.
The current landscape presents a challenging scenario for miners, but it may indicate a turning point for the price of Bitcoin in the short term.
