Avocado_onchain2025-03-12

Bitcoin Mining Difficulty Continues to Rise Despite Market Correction

Bitcoin’s mining difficulty remains in an uptrend, even as the market experiences a correction. During the extended correction phase that began in March 2024, mining difficulty saw a temporary drop, leading some to speculate that it resembled the end of the 2021 cycle (yellow zone in Chart 1). However, contrary to those predictions, Bitcoin’s price rebounded sharply. Although it is now undergoing a ~30% correction, mining difficulty continues to climb. A decline in mining difficulty typically signals miner capitulation (shutdown of less efficient mining rigs). So far, there are no signs of such behavior. However, if the correction extends further, we could see mining difficulty decrease due to miner capitulation. The Miner Position Index (MPI) also showed selling activity in November 2024, but it did not lead to a widespread sell-off. Instead, miners are currently maintaining a holding strategy (Chart 2). Given these two key on-chain indicators, the broader uptrend appears to be intact. This is a phase that requires patience rather than premature conclusions