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

Wall Road banking JPMorgan has just lately printed a report that implies that the Bitcoin manufacturing price has dropped 50% over the past month. At present, 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 Electrical energy Consumption Index.

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

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

Bitcoin Miner Capitulation

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

Final month, JPMorgan strategists stated that Bitcoin may additional witness promoting strain through the third quarter as nicely. Miners are additional more likely to liquidate their holdings going forward. Additionally, if the BTC manufacturing has truly 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’s an elevated likelihood {that a} long-term holder (LTH) capitulation is underway. Bitcoin buyers usually are not 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 a superb aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in the direction of the brand new rising Blockchain Know-how and Cryptocurrency markets. He’s constantly in a studying course of and retains himself motivated by sharing his acquired data. In free time he reads thriller fictions novels and generally discover his culinary expertise.

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