JPMorgan Says Bitcoin Production Cost Drops 50% to $13,000, Why This Is Negative for BTC?

Wall Street banking JPMorgan has just lately revealed a report that means that the Bitcoin manufacturing price has dropped 50% over the past month. Currently, the BTC manufacturing price stands at $13,000 down from the $24,000 price firstly of June 2022.

JPMorgan strategists led by Nikolaos Panigirtzoglou wrote that this drop comes amid the autumn in electrical energy use as per knowledge from Cambridge Bitcoin Electricity Consumption Index.

The banking large notes that that is an effort y the miners to shield profitability and deploy environment friendly rigs. However, it might additionally function a significant impediment to any beneficial properties within the Bitcoin worth. The JPMorgan strategists wrote:

“While clearly helping miners’ profitability and potentially reducing pressures on miners to sell Bitcoin holdings to raise liquidity or for deleveraging, the decline in the production cost might be perceived as negative for the Bitcoin price outlook going forward. The production cost is perceived by some market participants as the lower bound of the Bitcoin’s price range in a bear market.”

Bitcoin Miner Capitulation

During the second quarter of 2022, Bitcoin miners have been on a selling spree. As the Bitcoin worth corrected a staggering 70% from its all-time highs in November 2021, miners had to offload extra amount so as to cowl their operational prices.

Last month, JPMorgan strategists stated that Bitcoin might additional witness promoting stress through the third quarter as nicely. Miners are additional possible to liquidate their holdings going forward. Also, if the BTC manufacturing has really gone to $13,000 as per JPMorgan, miners may need a superb revenue to make on its new manufacturing.

On-chain knowledge supplier Glassnode just lately shared its insights whereby it notes that long-term holder (LTH) capitulation. The report provides:

“There is an increased probability that a long-term holder (LTH) capitulation is underway. Bitcoin investors are not out of the woods yet”.

On the upside, Bitcoin (BTC) nonetheless has to cross its 200-day EMA at round $22,500 and maintain above that stage to resume the uptrend.

Bhushan is a FinTech fanatic and holds a superb aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in direction of the brand new rising Blockchain Technology and Cryptocurrency markets. He is constantly in a studying course of and retains himself motivated by sharing his acquired data. In free time he reads thriller fictions novels and typically discover his culinary expertise.

The introduced content material could embody the private opinion of the creator and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The creator or the publication doesn’t maintain any accountability for your private monetary loss.