Difficulty will only drop if a lot of farms turn off their gear. It's likely that most folks will be mining at a loss for the first period after the halving. What sucks is, since mining only alters the total supply by a fraction at a time, the supply/demand curve won't be moved very much at all by the halving so it won't have much effect on the exchange rate.
Using the same argument, why don't you think that most of the miners are alreayd giving up(looking at the low prices ) ?
Shouldn't we also expect a drop in difficulty right now ?
This doesn't seem to indicate that.
Shouldn't the hash rate actually go down knowing the sites like C_Cex shut down mining.
I expected to see a drop in hash power as well.
Yes. My point of showing the graph was that not many miners are quitting due to the low prices.
But, that won't be the case on the day reward halves - perhaps as early as Jan. 2, 2016. That day it won't be a case of the home miner wondering 'Well maybe the price has dropped a little below the cost of mining but the price could go up and then I'll be kicking myself for not mining bitcoins that now would have a value greater than their mining cost'. No. The off switches will be flipped and home miners will wait for the value to rise to profitability. Same with large commercial farms that are operating in a hotter climate with somewhat better electric costs.
An interesting question is what happens to the buying and selling of Bitcoins. How long will transaction confirmations take then? If traders are forced to pay large transaction fees just to get a reasonable confirmation period, Bitcoin will be less attractive to use.