Bitcoin's mining difficulty fell by 5.3% on Sunday night UTC on the back off a recent drop-off in hash rate. On-chain data shows the network's mining difficulty dropped to 19.8 trillion, a level not seen since early January.
The mining difficulty is how the network aims to keep blocks being produced at an even rate, despite a wildly fluctuating hash rate. Every two weeks it makes the mining process easier or harder, in order to accommodate the varying hash rate.
After the previous difficulty adjustment on May 30, the network's hash rate remained steady. But on June 9, miners in Xinjiang's Zhundong Economic and Technology Development Zone received orders to close operations — a result of the China State Council's high-level comment about cracking down on bitcoin trading and mining activities. Following this news, major Chinese bitcoin mining pools saw a notable plunge in hash rate by over 20% on average.
From the last adjustment to June 9, Bitcoin's average block production interval was around 9.9 minutes, close to the intended 10-minute-per-block interval, data shows. But due to the hash rate plunge, the average block production interval between June 9 and 14 was extended to more than 12 minutes.
The difficulty drop may be welcome news for miners who are still online as their share of the total block subsidies over the next two weeks will increase. Meanwhile, bitcoin's price has jumped above $39,000 again, nearing the $40,000 level.
Bitcoin's price breaks out
Bitcoin's price started to see a notable breakout also around Sunday night UTC time following Tesla founder and CEO Elon Musk's tweet denying that he manipulated the cryptocurrency's market movements.
"This is inaccurate," he replied to CoinTelegraph's tweet about an article with comments that accused him of market manipulation.
"Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market. When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions," Musk said in the social media.
Bitcoin's price increased by over $1,500 within hours after Musk's reply, which came just a month after Musk said Tesla suspended the bitcoin payment option out of environmental concerns.