Analyst: New highs in Bitcoin mining difficulty and other signals may indicate that the price has reached a local bottom

ChainCatcher news, CoinDesk senior analyst James Van Straten stated that Bitcoin mining difficulty reached a historic high of 114.7 T after the weekend adjustment, an increase of 5.61% from the last difficulty adjustment.

This change coincides with the timing of the Hash Ribbon indicator signaling miner capitulation. The Hash Ribbon is a market indicator that typically forms when miners capitulate—when mining costs exceed profits, suggesting that Bitcoin may be nearing a local bottom.

According to data from Glassnode, miner capitulation began in early February. Bitcoin has dropped over 4% so far this month. Historically, when this indicator signals capitulation, it usually marks a local price bottom.

If this pattern holds, the bottom for Bitcoin could be around $91,000. The last capitulation signal appeared in October 2024, after which Bitcoin surged by 50%.

As mining difficulty increases, mining becomes more competitive, putting additional pressure on miners. January's production data reflects this, with Riot Platforms being the only major publicly listed miner reporting a month-over-month increase in output.