Bitcoin's Mining Flow Collapse: 11.16% Difficulty Drop, $33.31 Hashprice, $60K Price Support

The headline symptom is a 11.16% drop in Bitcoin's mining difficulty to 125.86 trillion, the largest single negative adjustment since China's 2021 mining ban. This drastic reset was forced by a roughly 20% drop in the network's total hashrate over the past month, as miners pulled machines offline. The stress was visible in the protocol itself, with average block times drifting to roughly 11.4 minutes ahead of the adjustment.

The root cause is a severe collapse in mining revenue. Bitcoin's price has collapsed more than 45% from its October all-time high, falling as low as $60,000 earlier this month. This price drop directly crushed the key profitability metric, sending hashprice to an all-time low of $33.31 per petahash per day. At that level, the economics for most miners are at or near break-even, forcing the large-scale shutdowns that triggered the difficulty reset.

The flow breakdown is now complete: falling price → collapsing hashprice → hashrate drop → difficulty adjustment. While the upcoming 11.4% difficulty decline offers near-term relief by boosting hashprice, it is a symptom of a deeper crisis in mining economics. The sector's ability to sustain operations hinges on whether the price can stabilize above the current $68,800 level.

The Economic Pressure: Breakeven Economics and Forced Deleveraging

The financial pressure is now acute, with hashprice collapsing to below $30 per petahash per second. This level is critical because it approaches the cash cost of operation for the most efficient public miners. CleanSpark's cash costs are $30/PH/s, while IREN's are $26/PH/s. At current hashprice, most miners are operating at or below their cash cost, turning mining into a break-even proposition.

This economic squeeze is forcing a wave of deleveraging and strategic pivots. Bitfarms is actively deleveraging amid the downturn, shifting its focus away from bitcoin mining toward AI and HPC power infrastructure. The move signals a recognition that mining economics have deteriorated to a point where even efficient operators are under severe financial strain.

Short-term disruptions have worsened the flow crisis. A recent winter storm in the U.S. forced as much as 40% of the network's hashrate offline at one point. This event compounded the longer-term pressure from falling prices, accelerating the hashrate drop that triggered the difficulty reset. The sector is caught between a collapsing revenue stream and physical operational shocks.

The Forward Flow: Catalysts and Key Watchpoints

The next immediate catalyst is the projected 5.63% difficulty rise on February 20. This upward adjustment will begin to compress hashprice again, adding pressure on miners already operating at or near cash cost. The sector's ability to absorb this next reset depends entirely on whether Bitcoin's price can stabilize above the critical $60,000 level.

That price level is the primary watchpoint. A break below $60,000 could trigger more forced liquidations and miner capitulation, accelerating a hashrate decline that would lead to another severe difficulty drop. The recent bounce off that low shows it remains a key psychological and technical support.

Broader market flows are the macro driver. Monitor exchange ETFs, which have been net sellers in 2026, and the volatility in tech stocks and Treasury yields that correlates with Bitcoin's risk-on sentiment. These factors will determine the overall liquidity and risk appetite that either supports or further pressures the mining sector's fragile recovery.