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Mining difficulty drops by most since 2021 as miners capitulate

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Mining difficulty drops by most since 2021 as miners capitulate

Bitcoin’s mining difficulty dropped by around 11%, its largest decline since China’s 2021 crackdown on the industry, after a sharp decline in hashrate triggered by plunging prices and widespread winter storm-related outages in the U.S.

Mining difficulty, which determines how hard it is to find new Bitcoin blocks, adjusts roughly every two weeks to maintain a 10-minute block interval on the network.

The latest change brought the metric down from over 141.6 trillion to about 125.86 trillion, according to Blockchain.com data, signaling a steep drop in the number of active machines securing the network.

The decline follows a series of blows to miners. Bitcoin prices have fallen significantly from an all-time high of $126,000 in October to around $69,500.

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That price drop forced many miners, especially those running outdated equipment and facing high energy costs, to shut down. Some also repurposed their hardware to focus on artificial intelligence (AI), as megacap firms offer stable contracts and often economically irresistible terms.

Bitfarms (BITF) notably saw its share price surge after saying it’s no longer a bitcoin company, and is instead focusing on data center development for high-performance computing and AI workloads.

Bitcoin mining revenue on a per terahash basis, measured via the hashprice, has plunged from nearly $70 at the time the cryptocurrency was trading at an all-time high, to now stand at little over $35.

Severe winter storms, particularly in Texas, compounded the situation. Grid operators issued curtailment requests to conserve electricity for residential users. Public mining firms scaled back production, with some seeing daily bitcoin output fall by more than 60%.

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Although a drop in difficulty might appear alarming, it functions as a self-correcting mechanism. For miners who remain online, the reduced competition can increase profitability and help maintain the business model.

Historically, major difficulty drops have also signaled market capitulation, often preceding a stabilization or rebound in price as miners sell the BTC they mine to cover operational expenses.

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Crypto World

Bitcoin, Ethereum, Crypto News & Price Indexes

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Bitcoin, Ethereum, Crypto News & Price Indexes

Solana’s SOL (SOL) has dropped 38% over the last 30 days, falling to a two-year low of $67 on Friday. Multiple analysts believe that the downside is not over for the seventh-placed cryptocurrency, with downward targets extending as low as $30.

Key takeaways:

  • Solana’s head-and-shoulders pattern targets a SOL price of $50 or lower.

  • MVRV bands point to a potential bottom, but support at $75 must hold.

SOL/USD weekly chart. Source: Coitelegraph/TradingView

Solana targets $42 after bearish confirmation

SOL price has already lost over 72% of its value since a cycle top of around $295 in January 2025. In doing so, its price confirmed a head-and-shoulders (H&S) pattern on multiple time frames.

Related: Pump.fun moves deeper into trading infrastructure with Vyper acquisition

Crypto analyst Bitcoinsensus shared a chart showing SOL validating a H&S pattern, hinting at more downside ahead.

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“Solana has confirmed a breakdown from this macro Head & Shoulders pattern,” Bitcoinsensus said in a Monday post on X, adding:

“​​The target could be as low as $50 per $SOL.”

SOL/USD weekly chart. Source: X/Bitcoinsensus

“This is a classic head and shoulders pattern with a measured move to $45,” analyst Nextiscrypto said about SOL’s two-week chart. But other analysts said the price can go even lower.

Pseudonymous analyst “Shitpoastin” said Solana’s price has also formed a “massive head and shoulders” pattern on the monthly chart over two years, “with nothing but air until $30.”

Source: X/Shitpoastin

The two-day candle chart, meanwhile, shows that SOL price had broken below the H&S neckline at $120 on Jan. 30.

SOL/USD two-day chart. Source: Cointelegraph/TradingView

The measured target of the H&S pattern, calculated by adding the head’s height from the breakdown point, is $57, representing a 32% drop from the current level.

Solana’s MVRV bands give hope for a bottom at $75

SOL’s price crash last week was stopped by support from the lowest boundary of its MVRV extreme deviation pricing bands, currently at $75.

These bands show when SOL is below or above the average price at which traders last moved their coins.

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Solana MVRV extreme deviation pricing bands. Source: Glassnode

Historically, SOL prices drop to near or even below the lowest MVRV band before a bottom is reached.

That includes the March 2022 bounce, when the SOL price rose 87% within three weeks to $140 after testing the lowest MVRV deviation band around $75. A similar rebound occurred earlier in December 2020.

Solana’s association with the FTX crash in November 2022, however, saw a significant deviation below this band, with the price dropping another 70% and bottoming around $7 in December that year.

Therefore, SOL’s drop below $75 spark the next phase of the correction as seen in 2022, likely aligning with the H&S target.