Ethereum mining is becoming less profitable even as its trading increases in anticipation of further price fall.
Miners have found it difficult to manage their operations as the timetable of the Ethereum Merge become uncertain in the recent past. In truth, the developers have repeatedly postponed the all-important “difficulty bomb” in the merge.
This made things difficult for Ethereum mining operators. The difficulty bomb is a piece of code in the Ethereum protocol that is designed to raise the difficulty of mining ETH regularly.
Since 2017, the implementation has been delayed up to six times. The next difficulty bomb schedule was recently scheduled for August.
Meanwhile, the hash rate of ETH has declined by 10% since April, making mining less profitable. According to CryptoQuant research, the Ethereum hash rate has dropped by 10% as profits have plummeted recently.
“The triple toxic mix of reduced income, increased operating costs, and the impending merge has caused some miners to stop their mining operations.”
This pattern may continue in the foreseeable future if prices fall any further, as predicted. The price of ETH has dropped to $900 from a high of $3,500 just three months ago.
The Ethereum merging is a long-awaited network update. The merger establishes a new proof-of-stake (PoS) consensus process, which replaces the old proof-of-work (PoW) system. Miners discover new blocks and add them to the blockchain in this process.
According to CoinMarketCap, Ethereum is currently trading at $1,142.18, up 5.20 percent in the last 24 hours. Net deposits on exchanges are low relative to the 7-day average, which is a key indicator of traders anticipating further price declines. Lower deposits can also be viewed as less selling pressure.
Furthermore, the ETH fear and greed index is at severe levels of worry. This could imply that the Ethereum price is widely expected to decline further.