The difficulty of mining a bitcoin block fell by 7.32%. As a brutal bear market continues to undermine profits, miners are powering down their machines.

In our latest data, the adjustment at block height 766,080 is by far the biggest downward change recorded since July 2021. This was when hordes of miners dropped off the network following China’s ban of the industry. At the time, China was the world’s biggest bitcoin mining hub.

Mining difficulty automatically adjusts according to the computing power online, which means that as more miners join the network, mining becomes harder. With a hard goal in place, there will always be a set amount of blocks mined per day.

In the past several months, bitcoin miners have found themselves at odds with a stubbornly low price of bitcoin. This has led to a decrease in their revenue that is outpaced only by the increase in their electricity costs. Major producers including Core Scientific and Argo Blockchain are dealing with liquidity crunches and Compute North has filed for Chapter 11 bankruptcy.

As new, more efficient machines have been delivered and miners have come online to join in on projects that started months ago, the hashrate has increased. Since early August the hashrate and difficulty have both increased by 33%.

The crypto winter that everyone has been talking about had finally seemed to reach the industry. Bitcoin miners were turning off their machines as the hashrate started dropping. Its the mid-November when profitability began to take a hit, but still well above before China’s crackdown on the industry.

Luxor’s hashprice indicator shows that the profitability of mining has been lowered by 20% in the last month.

“Even miners using energy efficient machines such as the Antminer S19j Pro need access to electricity priced below 8 U.S. cents per kWh,” Jaran Mellerud, analyst at Luxor, said. Though the average price on the network is about 5 cents per kilowatt hour (kWh), many miners are paying about 7 cents to 8 cents per kWh, Mellerud said.

‘Miners buying spot electricity and already operating close to breakeven may have seen their electricity prices rise just enough to flip their operations into cash-flow-negative territory,’ Mellerud said.

With its latest lower hashrate and difficulty, the network is not more vulnerable to attack. Computing power is spread among five big mining pools and 12 smaller ones, data from BTC.com show.