Bitcoin Mining Under Pressure: Why Hashrate is Falling Despite Price Rallies
Early 2026 finds Bitcoin miners in a familiar yet increasingly difficult position. Despite recent upticks in Bitcoin’s spot price, the network’s hashrate, which measures its computational power, has been declining from late-2025 highs. This scenario reveals a delicate balance where mining difficulty adjusts with a delay, and the relentless cost of power dictates which operations remain profitable and which are forced offline. While a rising Bitcoin price might suggest resilience, the reality at the margins is one of fragility: a small difficulty increase or a regional power surge can quickly flip a mining operation from active to curtailed.
Hashrate Retreats from Late-2025 Highs
Bitcoin’s network hashrate has cooled considerably since its late-2025 peak. JPMorgan initially estimated a 5% rise in monthly average hashrate for October to a record 1,082 EH/s. However, November saw a modest pullback to 1,074 EH/s, indicating a halt in continuous expansion. Since late December, daily estimates have been volatile, swinging above and below the 1,000 EH/s mark. This choppiness suggests miners are frequently cycling their machines on and off rather than maintaining consistent uptime, a trend also noted by YCharts’ data.
Key hashrate figures:
- Monthly-average hashrate (Oct. 2025): 1,082 EH/s (JPMorgan estimate, record).
- Monthly-average hashrate (Nov. 2025): 1,074 EH/s (slight pullback).
- 7-day hashrate average (Jan. 2026): 1,024 EH/s (recent cooling).
Hashprice, Not Just Bitcoin Price, Dictates Decisions
Miner behavior largely hinges on hashprice, the expected daily revenue per unit of hashrate. This metric determines the viability of even the least efficient rigs. Luxor’s January 12 update showed USD hashprice slipping from $40.23 to $39.53 per PH/s/day, a level described as "close to, or at, breakeven for many miners." This compression of profitability means network volatility can persist even during Bitcoin price rebounds.
As hashprice tightened, Bitcoin fell 2.9% to about $91,132, increasing pressure on miners whose costs remain static. Luxor also reported a 2.8% fall in the 7-day hashrate average from 1,054 EH/s to 1,024 EH/s. Recall that difficulty hit an all-time high in late October 2025, pushing hashprice to an all-time low near $36 per PH/day in November. While it has recovered slightly into early 2026, many operators are still on the brink, with the decision to operate largely dependent on thin power-cost margins.
“The network can stay volatile even during a spot rebound because miner profitability can remain compressed.”
Machine-Level Reality Check: Profit Margins Are Thin
Understanding profitability requires translating hashprice to per-rig revenue against electricity costs. For example, using a hashprice of $38.2 per PH/s/day and the U.S. industrial electricity average of 9.02 cents/kWh:
This illustrates that while many miners secure better rates and efficiencies, the marginal miner drives churn. At current hashprice levels, these operations increasingly act as flexible load, cycling on and off, rather than continuous infrastructure.
Difficulty: The Lagging Lever That Blindsides Miners
Bitcoin’s mining difficulty adjusts only every 2,016 blocks, roughly every two weeks. This lag prevents an immediate response to Bitcoin price or hashrate swings, forcing miners to absorb weak hashprice conditions for an entire epoch. This delay compresses margins and delays profitability rebounds. A fleet viable during a BTC rally can be squeezed when difficulty rises into the next window, and per-hash revenue fails to follow.
The first adjustment of 2026 saw difficulty fall 1.20% to 146.4T, but projections suggest a rise towards 148.20T by January 22. With Luxor pricing an average hashprice of $38.19 over the next six months, minimal relief is expected unless BTC price, fees, difficulty, or power costs significantly shift. This creates a network "whiplash": hashrate softens, difficulty lags, and miners face weaker economics until the protocol recalibrates.
Power Costs: The Ultimate Squeeze Point
Electricity costs are paramount. Luxor’s analysis shows implied compute revenue per MWh based on fleet efficiency:
- Under 19 J/TH: $97/MWh
- 19–25 J/TH: $75/MWh
- 25–38 J/TH: $51/MWh
Comparing this to U.S. wholesale electricity prices averaging $48/MWh and EU averages around $90/MWh in H1 2025, it’s clear that miners in the 25–38 J/TH tier are highly exposed. Rising delivered energy costs or unfavorable hedges can quickly lead to curtailment. The increasing prevalence of negative electricity prices in regions like Europe further favors flexible operators who can ramp up and down, capturing demand response payments, while penalizing rigid operations.
Texas: A Regulatory Wildcard for Miners
Texas remains a critical jurisdiction due to its grid policy and intense competition for interconnection. Senate Bill 6 allows ERCOT to mandate shutdowns or backup generation for new large electricity users (75 MW+) after December 31, 2025. With ERCOT’s load request pipeline exceeding 230 GW in 2025, 70% from data centers, competition is fierce. This scenario elevates the value of existing interconnections and stable contracts for Bitcoin miners, making expansion significantly harder without carefully negotiated terms.
What to Watch Next
The immediate future depends on:
- Difficulty adjustments: Will they ease pressure or intensify it?
- Hashprice stability: Will it stay above breakeven for marginal miners?
- Power volatility: How will energy costs impact less efficient fleets?
- ERCOT curtailment risk: Potential for abrupt hashrate dips independent of price.
- Data center competition: Further limiting access to low-cost power for miners.
With spot hashprice at $39.53 per PH/s/day, Bitcoin around $91,132, and a 7-day hashrate average at 1,024 EH/s, miners face critical decisions. The question is whether miner economics can support sustained uptime to regain past peaks, or if lagging difficulty and power constraints will keep the network in a stop-start mode, even with Bitcoin’s price strength.
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