Bitcoin's processing power seems to have taken a hit in recent days. As of press time, it is down 0.18% over the past 7 days. In addition, BTC's hash rate has fallen 24% since hitting an all-time high earlier this month.

However, a larger concern dominates, namely that mining bitcoin may not be as profitable as it once was.


Source: YCharts

Since hitting a new high on January 13 of this year, Bitcoin's hash rate has been at an even higher high until it finally peaked at 249 exa hashes per second (EH/s) on February 15. However, a sharp drop in hash count has been observed since then. In fact, at the time of writing, hash count was only recorded at 189 EH/s. It even dropped to 169 EH/s on February 27 before a brief rebound.

In addition, the Bitcoin mining difficulty will also be adjusted in less than three days on March 4. Note that the mining difficulty will automatically adjust after every 2016 blocks have been mined. This takes about two weeks, as the average mining time per block is 10 minutes. This determines the difficulty of mining the next block.

Oddly enough, mining difficulty has been successfully increasing over the last six difficulty adjustments since November 28, 2021. In fact, it also hit an all-time high of 27.97 trillion hashes last week.


Source: CoinWarz

The increased difficulty indicates more competition to mine blocks. This is evident from the dramatic increase in mining capacity since last year. According to the analytics tool CoinWarz, the current drop in hash rates has led to estimates that the upcoming adjustment could reduce the difficulty by as much as 4.15%.

This could give some respite to bitcoin miners, who have seen revenues continue to fall as competition intensifies, computing costs and BTC's recent price depreciation.

Since peaking last October, bitcoin mining monthly revenue and 7DMA revenue mining statistics have been spiraling downward. This indicates that operating mining equipment is becoming less and less profitable.


Source: TheBlock

Furthermore, according to Glassnode, BTC miners who were once considered net adders of bitcoin have become net sellers.

This has exacerbated the already growing selling pressure in the market. The fact that the average mining cost is only 16% below the average market price of bitcoin could provide some explanation for this upward trend. However, the drop in difficulty could fuel mining activity and sentiment, which could contribute to higher prices.