Bitcoin’s hash rate is plunging as soaring energy costs tied to the Middle East conflict put mounting pressure on miners and the broader crypto market.

The network’s hash rate has fallen about 8% over the past week to 920 EH/s, driven by geopolitical tensions from the Iran war and rising oil prices. Analysts estimate that 8% to 10% of global bitcoin mining occurs in regions highly sensitive to energy costs, making the sector especially vulnerable.

This drop may signal another miner capitulation phase, historically linked to downward pressure on bitcoin’s price, which is currently trading below $72,000—around 5% off Monday’s high.

As a result, the network is poised for an 8% reduction in mining difficulty, the second-largest negative adjustment in five years, following a major drop in mid-February. This underscores the volatility in mining activity and the challenges miners face.

Persistent low transaction fees, intense competition, and bitcoin price swings are squeezing margins. Many publicly traded miners are diversifying into AI and high-performance computing while increasing bitcoin sales to fund operations—factors that could continue to weigh on the cryptocurrency’s price.