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

Wall Road banking JPMorgan has not too long ago revealed a report that means that the Bitcoin manufacturing price has dropped 50% over the past month. Presently, the BTC manufacturing price stands at $13,000 down from the $24,000 price at first of June 2022.

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

The banking big notes that that is an effort y the miners to guard profitability and deploy environment friendly rigs. Nonetheless, it may additionally function a significant impediment to any features within the Bitcoin value. The JPMorgan strategists wrote:

“Whereas clearly serving to miners’ profitability and doubtlessly lowering pressures on miners to promote Bitcoin holdings to lift liquidity or for deleveraging, the decline within the manufacturing price is likely to be perceived as unfavorable for the Bitcoin value outlook going ahead. The manufacturing price is perceived by some market members because the decrease certain of the Bitcoin’s value vary in a bear market.”

Bitcoin Miner Capitulation

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

Final month, JPMorgan strategists stated that Bitcoin may additional witness promoting stress throughout the third quarter as effectively. Miners are additional prone to liquidate their holdings going forward. Additionally, if the BTC manufacturing has really gone to $13,000 as per JPMorgan, miners may need revenue to make on its new manufacturing.

On-chain information supplier Glassnode not too long ago shared its insights whereby it notes that long-term holder (LTH) capitulation. The report provides:

“There may be an elevated likelihood {that a} long-term holder (LTH) capitulation is underway. Bitcoin traders aren’t out of the woods but”.

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

Bhushan is a FinTech fanatic and holds aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in direction of the brand new rising Blockchain Expertise and Cryptocurrency markets. He’s repeatedly 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.

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