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After a tumultuous month for Bitcoin in November, few indicators are pointing out that the BTC price can see a major downtrend in the month of December and in the near short term. The core factor leading to this is the declining hashrate and mining difficulty, coupled with the dwindling mining operations & their poor state of affairs in the current bear market.
Bitcoin’s Mining Difficulty
The mining difficulty of Bitcoin experienced a significant drop on December 6th and it was an extremely unusual occurrence as the last time it took place was in July of 2021. According to the data on the BTC.com mining pool, the level of difficulty decreased by 7.32 % at a block height of 766,080.
Bitcoin miners seem to be turning down their mining machines as a result of the ongoing bearish market sentiment that has affected the whole cryptocurrency market. This is the lowest level seen since a 28% decline in July of last year, when China banned the mining of cryptocurrencies.
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Moreover, on-chain data shows that the Bitcoin hashrate (MA30) has also recently started to subside, along with the difficulty level.
Bitcoin Mining Industry Stutters
The ripple effect can be seen in mining companies as well, with a few inching towards shutting down or declaring bankruptcy.
Core Scientific Inc., the largest publicly traded Bitcoin mining business in the U.S., reported a $1.7 billion loss for the first nine months of the year. The firm further issued a warning in October that it might have to declare bankruptcy if it can’t obtain more capital to pay off its debt, which totals more than $1 billion. It suffered a $434 million loss in the third quarter.
Read More: After Core Scientific, Another Bitcoin Miner Flags Default Risks
The value of the company’s stock has decreased by approximately 99% this year, to just 16 cents ($0.16). Another mining company — Stronghold Digital Mining (SDGI) has fallen over -25.4% on news of the NASDAQ delisting crisis.
Crypto analysts and experts anticipate a domino effect once one of the top mining units suspends operations and files for bankruptcy proceedings.
Read More: Popular Analysts Predict Bitcoin and Ethereum Prices For Christmas
Combined with declining hashrate, mining difficulty and companies struggling to sustain, crypto analysts expect the Bitcoin (BTC) price to further dip in the near short term.
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