Record Bitcoin Difficulty Jump: What It Signals for BTC Price in 2026

You can trade Bitcoin (BTC) on Phemex with up to 100x leverage on BTC/USDT perpetual futures.

On February 19, 2026, Bitcoin's mining difficulty spiked 14.73% to 144.4 trillion, the largest absolute increase in network history and the biggest percentage jump since China banned mining in 2021. Hashrate recovered from a storm-induced low of 826 EH/s back to roughly 1 ZH/s. BTC trades around $68,000, roughly 20% below the estimated average production cost of $87,000.

That gap between price and production cost is the number traders should care about. Every previous time BTC has traded below what it costs to mine, a specific sequence of events has followed. That sequence is playing out right now.

What Triggered the Record Jump?

Winter storms hit the US in late January, knocking major mining operations offline across Texas and Georgia. Foundry USA, the largest mining pool, saw its hashrate collapse from nearly 400 EH/s to around 198 EH/s. Grid operators issued curtailment orders. Public miners like MARA, Riot Platforms, and CleanSpark scaled back or shut down entirely.

On February 9, difficulty dropped 11%, the steepest decline since China's 2021 crackdown. Then storms passed, power returned, and miners reconnected fast. Hashrate surged back past 1 ZH/s, blocks arrived faster than the 10-minute target, and the protocol corrected with the record 14.73% upward adjustment on February 19.

The speed matters. Hashrate rebounded in days, not months. That tells you how industrialized Bitcoin mining has become and how committed the surviving operators are, even while mining at a loss.

The Numbers Behind Miner Pain

Hashprice (daily revenue per unit of computing power) has collapsed 66% since BTC's October 2025 peak. Miners earn half the bitcoin per block after the April 2024 halving, and each bitcoin is worth roughly half what it was at the top.

Two credible sources frame the production cost floor differently. Checkonchain estimates $87,000 (industry average). JPMorgan's crypto team, led by Nikolaos Panigirtzoglou, estimates $77,000, reflecting difficulty relief before the latest spike. The most efficient miners (sub-$0.05/kWh power, latest S21-class ASICs) can produce BTC for $34,000-$43,000. Everyone else is underwater.

JPMorgan's February 2026 report noted that higher-cost miners have been selling bitcoin to fund operations, reduce debt, or pivot to AI. That selling amplified year-to-date price pressure. But they believe the exit of those miners has stabilized, and remain positive on crypto for 2026.

How the Miner Capitulation Cycle Works (and Where We Are)

When BTC trades below production cost, miners sell holdings to stay solvent. That selling pushes price lower. But it also forces the weakest miners offline, which drops hashrate, which lowers difficulty, which lowers production cost for survivors. Eventually, selling pressure dries up because there are no weak miners left to sell. Price recovers.

This cycle has five phases. Here is where February 2026 fits:

The February 19 difficulty spike to 144.4T is evidence that Phase 4 is in progress. Surviving miners have restored capacity and the network is rehashing at near-record levels. The question is how long Phase 4 lasts before Phase 5 begins.

In 2019, the gap between hash ribbon signal and price bottom was roughly 2 months. In 2022, it was about 3 months. During the 2021 China ban recovery, hashrate rebuilt over 6 months before price followed. The signal has been reliable on direction. Timing is the hard part.

One Thing That Makes 2026 Different

Mining companies are repurposing data center infrastructure for AI and high-performance computing. Bitfarms dropped "bitcoin" from its corporate name. Riot Platforms faces activist pressure from Starboard to expand AI operations. The economics work because AI training needs the same power infrastructure, cooling, and real estate that mining uses, and AI hosting revenue currently exceeds mining revenue per megawatt.

For hashrate, this creates a ceiling effect. Computing capacity that moves to AI does not return to Bitcoin mining unless BTC price rises enough to make mining more profitable again. Some of the hashrate lost during this bear market may never come back.

That is actually bullish long-term. Less hashrate competition means slower difficulty growth, lower production costs, and better margins for remaining miners at any given BTC price. The AI pivot acts as a pressure valve on the mining arms race.

But it also means 2026 capitulation carries more institutional risk. Public miners hold massive BTC positions and have debt obligations. If forced to liquidate at scale, the selling impact is larger than in previous cycles when mining was dominated by smaller operators.

What to Watch and How to Trade It

The key levels: $65,000-$68,000 is current support where whale accumulation is active. $77,000-$87,000 (production cost band) is the structural target if the capitulation cycle resolves as it has in every previous instance.

Trading BTC/USDT on Phemex:

Step 1: Create your Phemex account.

Step 2: Navigate to BTC/USDT futures.

Step 3: Deposit USDT. Select leverage (up to 100x available, though conservative sizing matters more than leverage in high-volatility environments like capitulation phases).

Step 4: Place your trade. The hash ribbon signal has a strong historical track record on direction, but timing the exact bottom is difficult. Position sizing and stop-loss discipline outweigh directional conviction here.

Frequently Asked Questions

What does 1 ZH/s hashrate mean?

One zettahash per second equals 1,000 exahashes, or 10²¹ hash computations every second. Bitcoin first reached this level in late 2025. For context, the network had roughly 100 EH/s in 2019.

Why did difficulty jump 15% while BTC price is down?

Difficulty tracks hashrate, not price. Storms knocked miners offline, hashrate dropped, difficulty fell 11%. When storms passed and miners reconnected, hashrate surged, triggering the 14.73% upward correction. The adjustment is purely mechanical.

Is miner capitulation bullish or bearish?

Short-term bearish (miners sell BTC to cover costs). Medium-term bullish (capitulation removes weak sellers, and the hash ribbon signal has preceded price bottoms by 2-4 months in every cycle since 2019).

Will the AI pivot permanently reduce Bitcoin's hashrate?

Partially. Infrastructure moved to AI does not auto-return. But new ASIC investment can replace lost capacity if mining economics improve. The likely result is slower hashrate growth rather than permanent decline.

Bottom Line

The production cost band between $77,000 and $87,000 is the number to anchor on. BTC sits 12-20% below it. The miner capitulation cycle is in Phase 4 (survivors stabilizing), with the hash ribbon signal suggesting a price bottom may form within 2-4 months if historical patterns hold.

Two scenarios from here: BTC rises toward production cost as weak-miner selling exhausts itself (the pattern in 2019, 2021, and 2022). Or BTC falls further, more miners capitulate, and production cost chases price down through additional difficulty adjustments. The 15% difficulty rebound suggests the first scenario is more likely. The network absorbed a severe disruption and came back stronger. But the institutional mining debt overhang in 2026 makes this cycle riskier than previous ones.

This article is for educational purposes only and does not constitute financial or investment advice. Bitcoin futures trading carries significant risk, especially with leverage. Past miner capitulation patterns do not guarantee future price behavior.