Bitcoin Mining Difficulty Expected to Drop Amid Intense FUD-Induced Sell-Off
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The Bitcoin (BTC) hash rate has shown significant volatility recently, mimicking the erratic pattern of the asset’s price.
The fiat value of the benchmark cryptocurrency has triggered a slowdown in the network’s processing power as we head into the end of November. A few days ago, reports showed that BTC’s hash rate maintained a consecutive ascent over the last three months.
However, this status has flipped significantly as the hash rate currently coasts around 168 Exahash per second (EH/s), down from 178 EH/s on November 24. Meanwhile, the network’s hash rate fell to 128 EH/s on Friday following a dramatic 28% plunge in 48 hours.
The hash rate slowdown has caused the BTC network to experience a lower difficulty than usual. Analysts expect the mining difficulty to fall lower for the first time since July 17. Interestingly, after the July downward difficulty adjustment, the mining difficulty made an upward adjustment nine consecutive times.
That said, the next adjustment will occur later today, and analysts forecast a -0.38% drop. While it seems like a minuscule decline, the negative adjustment would deter the mining difficulty from reaching its all-time high (ATH) anytime soon.
Bitcoin’s mining difficulty recorded an all-time high on May 13, after it reached 25.05 trillion. Currently, the mining difficulty rate resides at 22.67 trillion, and the projected decrease should bring it down to 22.58 trillion.
Key Bitcoin Levels to Watch — November 28
As mentioned earlier, BTC currently trades under intense bearish pressure, following the discovery of a new COVID-19 variant in South Africa. The new variant could be more transmissible and deadly than its predecessors, according to the WHO. This announcement sent the entire financial markets into aggressive sell-off modes as investors moved to less risky assets.
That said, the benchmark cryptocurrency currently trades within a tight range between $55K and $54K as traders watch new developments closely. This makes it advisable for bulls to wait for some sustained move above the $57K level (200 SMA) to confirm a bullish reversal.
Meanwhile, my resistance levels are at $55,000, $55,500, and $56,700, and my key support levels are at $54,000, $53,000, and $52,000.
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Bitcoin Market Capitalization: $1.02 trillion
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