Indicator Overview

The Bitcoin Difficulty is a high-fidelity diagnostic tool designed to track the computational security and mining competition of the Bitcoin network. By plotting the raw Network Difficulty, a measure of how difficult it is to find a new block, this indicator visualises the "Proof of Work" intensity that underpins Bitcoin’s scarcity and network integrity.

The visual core of the tool is the segmented, colour-mapped difficulty trend that transitions based on the absolute growth of the hash rate. This heatmap allows users to see the literal pulse of the network, identifying periods of explosive infrastructure growth and mining capitulation. It serves as a fundamental benchmark for network health, showing the real-world resource commitment required to maintain the blockchain.

How To Use

Traders and analysts can use the Difficulty Heatmap to identify structural shifts in network security and miner sentiment.

• Difficulty Adjustments & Smoothing: Using the MA Smoothing toggle, users can apply a 30-day or 1-year Moving Average. This filters out the bi-weekly adjustment noise, revealing the macro trend of the network’s growth and helping to spot mining capitulation (when difficulty drops significantly during price crashes).

• Growth Cycles: Rapidly ascending segments typically correlate with bull market arms races where miners deploy new, more efficient hardware. Horizontal or descending segments often signal market cooling where older hardware becomes unprofitable and is switched off.