As the data from Blockchain.com shows, the Bitcoin hashrate began to fall around October 18. While it exceeded 146 psi, it dropped to 107 psi in the space of two weeks, its most dizzying dive this year:
Hashrate Bitcoin BTC progression
The Bitcoin hashrate has thus returned to levels not seen since June 2020. It should be noted that the other two major hashrate collapses in 2020 were due to the crash of the cryptomoney markets at the beginning of the Covid-19 crisis last March and then during the halving of Bitcoin in May.
Several factors can explain this sudden fall. On the one hand, the difficulty of mining began to rise again on October 17. The difficulty was automatically readjusted by +3.62%, making the BTCs harder to produce. It should be noted, however, that the difficulty had already increased by +11.35% in September, which had not triggered such a fall in hashrate.
This indicator must therefore be taken in conjunction with a meteorological trend. The rainy season has indeed ended in Sichuan in China, where many mining farms are located. Local miners can no longer take advantage of the particularly low electricity rates during the rainy season, so a number of them have stopped participating in the grid.
The long-term effects of Bitcoin’s halving can also be felt. Mining rewards have been halved since last May, which immediately eliminated some miners. The recent drop in hashrate may therefore also be due to a new wave of abandonment by miners who had been hanging on.
However, the BTC course has been in great shape in the last few days. This weekend, Bitcoin briefly surpassed $14,000. That’s a level not seen since January 2018, when Bitcoin hit a record high of nearly $20,000.
During the same period when the hashrate fell, the price of Bitcoin rose by 22%:
Bitcoin BTC November 2020 price
This morning, BTC’s share price exceeded $13,700, with a market cap of $253 billion. This corresponds to an increase of +48% over the last twelve months. However, traders remain cautious: the results of the U.S. presidential election fall this week, and disruptions are expected. The effect on the traditional markets and cryptomoney could therefore be significant.