BlockBeats message, December 5th, JPMorgan analyst believes that for Bitcoin's recent price trends, the resistance capacity of Strategy (stock code MSTR) is more important than mining activities. Although this largest Bitcoin holder in the world has not started selling, Bitcoin miners seem to be facing increasing selling pressure.
JPMorgan Managing Director Nikolaos Panigirtzoglou and his team pointed out in a report on Wednesday that the recent pressure on Bitcoin prices mainly stems from two factors: first, the recent decline in Bitcoin network hash rate and mining difficulty, and second, the latest developments surrounding Strategy.
Analysts indicate that the decline in computing power and mining difficulty reflects the influence of two forces: China's reaffirmation of its ban on Bitcoin mining following a surge in private mining activities, and the drop in Bitcoin prices combined with high energy costs squeezing profits, leading to the exit of high-cost miners outside of China from the market.
Analysts point out that although a decline in computing power typically increases miners' income, 'the current Bitcoin price still continues to hover below its production cost,' which has brought selling pressure to the Bitcoin market.
JPMorgan analysts have currently revised down their estimate of Bitcoin's production cost to $90,000, down from $94,000 last month. According to analysts, this update is based on an electricity price assumption of $0.05 per kilowatt-hour, and for high-cost producers, every increase of $0.01 per kilowatt-hour will raise their production costs by $18,000.
JPMorgan's report states: 'Against the backdrop of high electricity prices and falling Bitcoin prices squeezing profits, some high-cost miners have been forced to sell Bitcoin in recent weeks.'
