The Great Hash-power Migration is underway, as “about 50% of Bitcoin miners are offline and on the go,” according to the latest On-chain report from Glassnode.
The Chinese crackdown on mining is not contributing to the bullish asset market. Today (06), the price of Bitcoin had a not very significant growth, considering the last 24 hours, and remained at US$ 33,728, according to CoinGoLive.
See also: In China, no institution is allowed to provide services for virtual currency transactions.
Migration of Miners
As the Bitcoin network adjusts to an incredible decline in mining power this week, the protocol experienced the biggest difficulty setting in history, tuning 27.94% down.
As the impact of China’s mining ban reaches its peak, volatility also affects hash-power metrics.
This is because when a significant proportion of hash-power goes offline, blocks from the network are mined at a slower pace until the difficulty is adjusted down.
“The hash rate on the network was typically around 180 EH / s at peak, and dropped to a local low of 65 EH / s (in line with the average blocking time of 1,958s on June 28),” as he reports the report.
Looking at the entire mining rate history, this was the longest average blocking time since the 2009 cypherpunk era, where Bitcoin didn’t even have a market price.
“The hash rate has since recovered and stabilized around the 88 to 110 EH / s range, reflecting an overall decline of 38% to 49% in hash power”, indicating which proportion of the network was affected by the Chinese ban.
Similar events usually represent the miner’s profit taking, or occur after halvings, and are observed at the end of bear markets.
It turns out that this recent pattern is the result of miners who are now shutting down the machines, or rather, replacing the loss-making machines under pressure from the Chinese authorities. Therefore, Glassnode still signals that a sign of this, historically, may also be related to strong reversals in bull markets.