Key Points:

• Bitcoin’s difficulty reached a historic high of 114.7 trillion, reflecting a 5.6% increase over the weekend.
• The Hash Ribbon metric indicates a capitulation among miners, often signaling local price bottoms for Bitcoin.

Bitcoin’s difficulty adjustment has reached an unprecedented level, according to CoinWarz. This is aligned with the Hash Ribbon metric indicating miner capitulation, a phase where mining costs exceed profitability, which frequently hints at local price bottoms.

As reported by Glassnode, this miner capitulation began in early February, coinciding with a 4% decline in Bitcoin’s price this month. Historical trends suggest that such capitulation signals often precede local price recoveries.

If this pattern continues, analysts predict that Bitcoin’s potential bottom could be around $91,000, recalling the last capitulation in October 2024, right before a significant price surge of 50%.

The observed rise in difficulty correlates with Bitcoin’s hash rate reaching an all-time high on February 4. Mining difficulty adjusts approximately every two weeks, targeting an average block time of 10 minutes. Increased difficulty enhances mining competition and exerts additional pressure on miners.