Are miners bullish? Bitcoin mining difficulty sees biggest increase in 3 months

The average Bitcoin outflow from miners continues to decline.

Bitcoin (BTC) mining difficulty increased by approximately 11% on Jan. 9, according to data from BTC.com. This marks the first time this year that the metric will exceed 20T and the largest increase in nearly four months.

"The growth of the total network computing power is once again making people want to cry!" A popular anonymous Bitcoin trader, hodlonaut, commented three days ago. "When the mining difficulty is readjusted, it will exceed 20T for the first time in Bitcoin history."

Bitcoin network difficulty reaches 20T

Network difficulty is a relative measure of how hard it is to mine a new block for the Bitcoin blockchain.

The current hash rate stands at a record high of around 148 EH/s, and difficulty adjustments (which occur every 2016 blocks) ensure that the time between mined blocks remains at an average of 10 minutes.

Bitcoin network difficulty. Source: Blockchain.com

Miners remain bullish

At the same time, the simultaneous increase in total network computing power and mining difficulty shows that miners are continuing to devote record resources to protecting and investing in the Bitcoin network.

In addition, the Miner Position Index (MPI), which calculates the ratio of BTC leaving all miner wallets to its 1-year moving average, is currently at 4.5. A value greater than 2 indicates that most miners should be selling.

This suggests that miners are in no rush to give up their freshly mined Bitcoin at the moment, especially since exchange reserves have plummeted and prices are in a strong accelerating uptrend.

Therefore, it makes sense for some miners to hold on to their inventories and benefit from the accelerating bull run that could last until December 2021, according to some forecasts.

Meanwhile, as the underlying consensus of the Bitcoin network becomes stronger than ever, concerns about a “mining death spiral” continue to be disproven with each new network record. Overall, Bitcoin miners appear to be financially secure due to the rising Bitcoin price, and despite it never being more difficult to mine Bitcoin, miners remain financially healthy.

According to the latest data from Clarkmoody, each BTC block mined is currently worth approximately $253,600, of which approximately 9.44% comes from network transaction fees.

Original translation from coindesk