Warning: Blockchain difficulty adjustment affecting price movements

Below are notable difficulty adjustments when hash rate fell and block times become slower for Bitcoin.

1. 26 Mar 2020 [difficulty adjustment -15.95%, avg block time 11min 54secs]. On the 28th price crashed from $6674 to $6138 ( -8%).
2. 8 Nov 2019 [difficulty adjustment -7.1%, avg block time 10min 46secs]. On the same day price crashed from $9234 to $8783 ( -4.88%).
3. The next big adjustment was around Nov to Dec 2018 and there were 3 big adjustments with high block times.

• 19 Dec 2018 [-9.56%, avg block time 11min 3secs]
• 3 Dec 2018 [-15.13%, avg block time 11min 47secs]
• 17 Nov 2018 [-7.39%, avg block time 10min 48secs]
• There was huge drop off starting on 14th Nov all the way to a bottom on 14-15th Dec ($6351 to $3288 around -48%).

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Current situation:

We are 1 day 10 hours from the next difficulty adjustment. It was hard for me to find the current average block time, I did find a median block time taken on the 17th and it was 14.8min. If we take from 14 min avg block time and to be adjusted back to 10 min, that will be -28.5% difficulty adjustment. For people who do not understand blockchain, basically with the Bitcoin 3rd halving, mining profitability fell for a lot of miners and they probably turned off their miners therefore the blockchain mining time became considerably slower which is reflected with slow transaction speed and higher fees as seen currently. Bitcoin sellers moving their BTC from wallet to an exchange are faced with slow transaction speed and therefore the sell pressure of BTC fell considerably which will attribute to the current price increase.

My personal opinion will be that there will be an impending big drop off around 10-15% in this week (18-23rd May 2020). I wish all my fellow Bitcoin compatriots safe trading and please be careful of fomo, do not lose your shirt. I am not an expert with such analysis and I do not know if my sources are accurate enough but I hope this sharing helps. Not planning on shorting Bitcoin.

Update 1: As pointed out by u/kairepaire, the current avg block time will be averaged out due to the fast mining before the halving event so the difficulty adjustment will not be that huge (single digit rather than double digit %). However for the consequent next difficulty adjustment, it will reflect the entire time interval period of after the halving which will have the correct slower avg block time. Therefore it is like a race. A race between price hike high enough to attract more miners to reduce avg block times versus the closing window of roughly 2 weeks before the next difficulty adjustment.

References:

Difficulty adjustment dates taken from https://btc.com/stats/diff

Bitcoin graph history for price movement taken from coinmarketcap.

Median confirmation time (block time) taken from https://www.blockchain.com/charts/median-confirmation-time