Bitcoin mining took a big hit when the Chinese authorities commenced a crackdown on crypto mining. This had led to an exodus of miners out of China. Which had been the world’s headquarters of mining at the time. Over 70% of the entire mining in the world is carried out in China before the crackdown had commenced.
Following this had seen a decline in the difficulty of mining bitcoin. This was promptly followed by declining prices across the market as miners looked for other places to set up shop.
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A new metric now indicates that miners may have completed their mining migration out of China. The chart shows that the bitcoin mining difficulty has now picked back up. Showing that the miners that were forced to move out of China have now been able to resume their mining activities elsewhere.
Price Movements With Mining Difficulty
Following the China crackdown back in May, the price of bitcoin had experienced a significant dip in price. As miners had to have their mining rigs airlifted and moved out of Chinese provinces. Bitcoin hash rate had fallen during this time. Hitting yearly lows as China had sent the majority of miners offline following the crackdown.
Bitcoin mining difficulty picking back up | Source: Coin Metrics
Historical charts showed that the price of the cryptocurrency has consistently gone up as the mining difficulty had increased. This is especially prominent during bitcoin halvings. This is when the amount of bitcoins mined per block is cut in half. And halvings happen every four years on the network.
This is a design that introduced even more scarcity over time as more coins are mined. Halvings will continue until all 21 million are mined. The most recent halving saw the price of bitcoin shoot up into a new all-time high. Hitting $64K at its peak, before experiencing dips that dragged down the price.
Bitcoin Price Going Forward
Miners coming back online fully will see the price of bitcoin go up further. The mining difficulty will continue to increase as miners set up in new places.
Bitcoin has seen increased movement as volatility and trading volumes start to pick up. The price has so far seen massive recoveries following the recent short squeezes that saw the price adding 12% in a day. And seeing gains of over 21% over the span of a week.
This recovery comes after the price of the digital asset had lagged for months following the bull run. Bears had controlled the market for the better part of a month. Pulling the price down with dip.
Following a wave of positive news in the market has now seen the price of bitcoin recovering. More and more indicators show that the market might be heading into another bull market.
BTC price breaks $40,000 | Source: BTCUSD on TradingView.com
Bitcoin has now successfully broken the $40,000 resistance point and is now trading at $40,470.
Featured image from Bitcoin News, charts from Coin Metrics and TradingView.com