Bitcoin Faces Pressure From Miners: What Is Hash And Why Does Hashrate Drop

Hashing is the fundamental cryptographic function that secures the Bitcoin network. Every time a transaction is validated or a new block is generated, miners must solve complex mathematical problems using hash functions, which requires enormous computational power. The hashrate, then, is the total amount of computational power that the Bitcoin network devotes to solving these cryptographic problems. When the hashrate drops, it means that there are fewer machines mining, which usually indicates economic pressure on the mining sector.

What is hash and hashrate in Bitcoin?

The hash functions as the security core of Bitcoin. It is a cryptographic algorithm that converts data of any size into a unique and irreversible string of characters. For Bitcoin, this process is critical: each block contains the hash of the previous block, creating an unbreakable chain. Miners are constantly competing to find the right hash that validates transactions, and the first to do so gets the reward.

The hashrate measures this combined capacity. It is expressed in units such as terahashes (TH/s), exahashes (EH/s), or zettahashes (ZH/s), depending on the scale. A higher hashrate means greater security on the network and more active miners on the network. When the hashrate crumbles, as it is happening now, it is a sign that miners are facing difficult economic conditions.

The 15% drop in hashrate: sign of mining capitulation

Bitcoin’s computational power has retreated roughly 15% from its highs recorded in October 2025. The hashrate dropped from around 1.1 zettahashes per second (ZH/s) to about 977 exahashes per second (EH/s). This contraction reflects the plight miners face: tighter profit margins, high operating costs, and pressure to pull the plug on equipment.

Glassnode’s Hash Ribbon metric, which tracks miner capitulation by comparing short-term and long-term hashrate trends, reversed its signal on Nov. 29. This event occurred shortly after Bitcoin bottomed near $80,000. When the Hash Ribbon is reversed, miners are forced to sell bitcoin to fund their operations, increasing supply pressure on the market in the short term.

However, this scenario is not necessarily pessimistic. VanEck noted that historically, periods of intense stress between miners have preceded a renewed momentum in Bitcoin’s price. The reason: when inefficient miners leave the market, the selling pressure eventually dries up, creating the conditions for a recovery.

Mining difficulty in adjustment: the seventh decline in eight periods

Bitcoin’s algorithm automatically adjusts the mining difficulty every 2,016 blocks to keep the block time close to 10 minutes. With the drop in hashrate, the difficulty should be reduced. By the end of January 2026, mining difficulty will decrease by about 4%, being pegged at around 139 trillion. This will be the seventh negative adjustment in the last eight adjustment periods.

These repeated declines reinforce the pressure on miners and show that the sector is going through a significant consolidation phase. Less efficient equipment is being taken offline, while only miners with greater cost advantages manage to stay operational.

Miners pivot to AI: selling pressure on Bitcoin

In addition to the economic pressure from reduced margins, some miners are making strategic decisions to diversify. Companies like Riot Platforms are selling bitcoin to fund capital-intensive investments geared toward artificial intelligence and high-performance computing (HPC). This reorientation generates additional supply pressure in the short-term market.

Riot Platforms announced deals with AMD to expand its AI infrastructure, a move that requires liquidating existing assets to fund these new operations. This pattern reflects how some of the largest bitcoin producers are evaluating new economic opportunities beyond traditional mining.

Capitulation or contrary signal? Expert analysis

Analysts are divided on the interpretation of these events. Some see the mining capitulation as a sign of short-term risk. However, investors like VanEck see it as a contrarian indicator: a market cleanup that eventually leads to healthier valuations.

The hash ribbon could reverse again when the 30-day moving average of the hashrate breaks above the 60-day moving average. Historically, this setup has coincided with substantial improvements in Bitcoin’s price. In this context, the current outage could represent an opportunity for efficient miners and a transition to a more robust ecosystem.

Market impact: Bitcoin and Dogecoin under pressure

At the market level, Bitcoin is currently trading at $85.32K, down 4.89% in 24 hours. This pressure reflects not only mining activity but also the broader risk-off sentiment in cryptocurrency markets.

Dogecoin is also experiencing pressure, trading at $0.12 down 6.01% in 24 hours. The memecoin dropped below the key support of $0.1218 with significant volume, turning that level into resistance after a bounce near $0.115. Traders monitor the $0.115–$0.12 zone as a critical decision area: holding and reclaiming $0.1218 could indicate stabilization; A collapse below $0.115 would open the way to $0.108–$0.10.

Conclusion: Understanding hash is understanding Bitcoin

Understanding hash and hashrate is essential for interpreting events like the current one. When the hashrate drops, the real pressure within the mining ecosystem is revealed. However, as history has shown, these capitulations can be precursors to healthier markets. The miners that survive this phase are likely to be those with more competitive cost structures, strengthening the Bitcoin network in the long run.