Bitcoin Network Difficulty Surges to New Highs, Triggering Miner Capitulation and Suggesting a Market Bottom

Bitcoin’s mining difficulty has reached an all-time high of 114.7 trillion (T) after a 5.6% upward adjustment over the weekend, according to CoinWarz. This increase coincides with the Hash Ribbon metric signaling miner capitulation, a phenomenon that often suggests a local bottom in bitcoin’s price.

The Hash Ribbon metric, which tracks miner behavior, points to capitulation when the cost of mining exceeds profitability. Data from Glassnode reveals that the miner capitulation trend began in early February, with bitcoin’s price dropping over 4% so far this month. Historically, such signals have typically marked a local price bottom for the cryptocurrency.

If the pattern holds, bitcoin’s potential bottom could be near $91,000. A similar signal was observed in October 2024, just ahead of a 50% surge in the cryptocurrency’s price.

The increase in difficulty is a result of bitcoin’s growing hash rate, which hit a new record on February 4. The difficulty adjusts every 2,016 blocks to maintain a consistent block time of around 10 minutes. As difficulty rises, mining becomes more challenging, increasing pressure on miners. Riot Platforms (RIOT) was the only major public mining company to report a month-over-month production increase in January, reflecting the tough conditions in the industry.