The price of Bitcoin has reached a two-year high of more than $19,000 and fallen below $17,000 more than once in the span of a week as mining difficulty continues to rise.
According to on-chain analytics provider Glassnode, Bitcoin (BTC) mining difficulty increased by 8.9% today, putting the metric within 5% of its all-time high value set last month.
#Bitcoin mining difficulty increased by 8.9% today.— glassnode (@glassnode) November 29, 2020
It is now only 4.4% below its ATH.
Chart: https://t.co/qtmuDmTfGS pic.twitter.com/1eX63yBAgc
A rise in mining difficulty marked the start of bull cycles in 2013 and 2016, though it remains to be seen whether the coin’s recent rally to within 3% of its ATH price is long-term bullish. The price of Bitcoin fell by 11% last week as many whales moved some of their holdings to exchanges and is $18,122 at the time of publication.
Greater mining difficulty can mean an increase fees for users and the time required to generate a block in addition to increasing the number of unmined transactions in Bitcoin’s mempool. According to estimates from Earn.com, the optimal BTC transaction fee is currently 14,272 satoshis, or roughly $2.60.
The Ethereum (ETH) blockchain has also seen record highs recently. Glassnode reported mining difficulty for the network was at a two-year high on Friday following the price of the token falling from more than $600 on Nov. 23 to $513 in three days.
The network hash rate — an indication as to how much computing power is being dedicated to validating Bitcoin transactions — plunged following the metric and mining difficulty reaching an ATH in October. Data from Blockchain.com shows the metric fell more than 27% between Oct. 17 and Nov. 2, from 146.5 EH/s to 106.6 EH/s. Bitcoin’s hashrate is currently 130.15 EH/s, according to BTC.com.
At the time of publication, the price of Bitcoin is staying above $18,000, having risen 1.9% in the last 24 hours.