Bitcoin Mining Difficulty Hits Record High Amidst Miner Capitulation

Bitcoin mining difficulty reached an all-time high of 114.7 T this week, marking a 5.61% increase from the previous adjustment. This significant rise in difficulty coincides with the Hash Ribbon indicator signaling miner capitulation, a market phenomenon that typically occurs when mining costs exceed profits.

Glassnode data suggests that miner capitulation began in early February, with Bitcoin prices falling by over 4% this month. Historically, when the Hash Ribbon indicator signals capitulation, it often marks a local price bottom for Bitcoin. If this pattern holds true, Bitcoin's bottom could be around $91,000, as the last capitulation signal appeared in October 2024, followed by a 50% surge in Bitcoin's price.

The increasing mining difficulty has made the competition more intense, putting additional pressure on miners. Production data for January reflected this trend, with Riot Platforms being the only major publicly traded miner to report a month-over-month output increase. As mining becomes more competitive, miners must adapt their strategies to remain profitable in the face of rising difficulty and falling Bitcoin prices.