Bitcoin mining difficulty plunges 11.16% — largest one-day drop since China ban, miners pushed toward unprofitability
Bitcoin’s network difficulty fell 11.16% to 125.86 trillion on Feb 7, the biggest one-time drop since China’s 2021 mining ban. Analysts link the decline to roughly a 20% drop in hashrate over 30 days, driven by a >45% BTC price correction from October highs, and operational disruptions from U.S. Winter Storm Fern that temporarily removed about 200 EH/s of supply. Luxor’s Hashrate Index slipped from >1.1 ZH/s in October to a record low ~863 EH/s; Foundry USA reported hashrate declines of up to ~60%. Hashprice sank to roughly $33–$35 per PH/s/day, below common breakeven levels near $40/PH/s/day. Equipment economics deteriorated: only latest Antminer S23-series rigs remain broadly profitable, while older models (Whatsminer M6, Antminer S21) approach or fall below breakeven. Checkonchain estimates average production cost near $87,000 per BTC vs. spot around $69,000, implying many miners—particularly higher-cost operators—are mining at a loss. Immediate implications include higher miner capitulation risk and potential near-term sell pressure as unprofitable rigs are idled or sold; lower difficulty may temporarily reduce mining costs and improve short-term profitability for remaining efficient miners. Traders should monitor hashrate trends, miner shutdown reports, BTC block times, hashprice, and miner revenue data — since elevated network variance and concentrated miner selling can amplify short-term price sensitivity. Longer-term outcomes depend on BTC price recovery, further hashrate adjustments, and hardware refresh cycles.
Bearish
The net effect is bearish for BTC price in the near term. A >11% difficulty drop tied to a ~20% hashrate decline, large hash outages (≈200 EH/s) and a >45% price correction signals miner stress. Many miners are operating below estimated production costs (~$87k vs spot ~ $69k), raising the probability of capitulation, forced sales of BTC, and elevated miner sell pressure. Lower hashprice and unprofitable legacy rigs increase short-term vulnerability to supply shocks. While difficulty relief reduces mining costs and may temporarily improve margins for the most efficient operators, that effect is unlikely to offset broad selling pressure unless BTC price stabilizes or rebounds. Over the medium-to-long term the story is more neutral: difficulty and hashrate typically re-equilibrate via shutdowns, relocation, or hardware refresh cycles, and a sustained BTC price recovery would flip the outlook. For traders: expect increased volatility, potential downward pressure on BTC until miner stress eases, and trading opportunities around washouts, but monitor hashrate, miner inventory and hashprice for reversal signals.