JPMorgan Chase: Selling pressure from high-cost miners and Strategies is the main factor behind Bitcoin's decline.

According to a report released Wednesday by JPMorgan Chase Managing Director Nikolaos Panigirtzoglou and his team, the recent continued pressure on Bitcoin prices is mainly due to two factors: the recent decline in Bitcoin network hashrate and mining difficulty, and the latest developments surrounding Strategy.

Analysts say the decline in hashrate and mining difficulty reflects the combined effect of two forces: China reiterating its ban on Bitcoin mining after a surge in private mining activity, and lower Bitcoin prices and high energy costs squeezing profits, leading high-cost miners outside of China to exit the market.

While a drop in hashrate typically increases miners’ revenue, analysts say that “Bitcoin’s price continues to hover below its production costs,” putting selling pressure on the first and largest cryptocurrency.

JPMorgan analysts have now lowered their estimate of Bitcoin's production cost to $90,000, down from $94,000 last month. The analysts estimate this update is based on an electricity price assumption of $0.05 per kilowatt-hour; for high-cost producers, every $0.01 per kilowatt-hour increase would add $18,000 to their production costs.

A JPMorgan report stated, "Some high-cost miners have been forced to sell Bitcoin in recent weeks due to squeezed profits caused by rising electricity costs and falling Bitcoin prices."

Even so, analysts say miners are not the primary driver of Bitcoin's next move. Instead, they believe Strategy's balance sheet and its ability to avoid selling Bitcoin are the key factors. (The Block)