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 value has dropped 50% over the past month. At the moment, the BTC manufacturing value stands at $13,000 down from the $24,000 value initially 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 big notes that that is an effort y the miners to guard profitability and deploy environment friendly rigs. Nevertheless, it may additionally function a serious impediment to any beneficial properties within the Bitcoin value. The JPMorgan strategists wrote:
“Whereas clearly serving to miners’ profitability and doubtlessly decreasing pressures on miners to promote Bitcoin holdings to lift liquidity or for deleveraging, the decline within the manufacturing value is likely to be perceived as unfavorable for the Bitcoin value outlook going ahead. The manufacturing value is perceived by some market contributors because the decrease certain of the Bitcoin’s value vary in a bear market.”
Bitcoin Miner Capitulation
In the course of the second quarter of 2022, Bitcoin miners have 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 to be able to cowl their operational prices.
Final month, JPMorgan strategists mentioned that Bitcoin may additional witness promoting stress in the course of 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 a very good revenue to make on its new manufacturing.
On-chain knowledge 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 chance {that a} long-term holder (LTH) capitulation is underway. Bitcoin buyers are usually 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 degree to renew the uptrend.
