Morgan Stanley analyst issued a latest research report on Thursday, warning that Bitcoin is still in an “overbought zone” and may further decline. Previously, Morgan Stanley also predicted that after the halving, due to the reduction of mining rewards and the increase in mining production costs, Bitcoin may fall to $42,000.
(Bitcoin ETF net outflows for four consecutive days: BTC falls below 65,000, and Ethereum loses 3,500 US dollars. Is the selling pressure over?)
(Bitcoin broke through 68,000! The Fed froze interest rates for the fifth time, Powell released a dove “three interest rate cuts this year”, and the US stock market reached a new historical high again.)
After reaching a historical high of $73,777 on the 14th, Bitcoin has continued to experience a significant decline this week, falling below $61,000 on the 20th, and then rebounding, oscillating around $65,000 at the time of writing.
In this context, Morgan Stanley analysts issued a latest research report on Thursday, warning that Bitcoin is still in an “overbought zone” and may further decline.
Nikolaos Panigirtzoglou, head of Morgan Stanley’s analysis, pointed out in the report that based on Morgan Stanley’s futures position indicator and the premium of Bitcoin futures prices over spot prices, Bitcoin is still in an overbought state, and only a few positions have been closed so far. Basically, the market holds an optimistic view that Bitcoin will rise before the end of the year, and the two main reasons are the expectation that Bitcoin spot ETF will continue to bring incremental funds and the reduction of Bitcoin’s new coin supply after the halving. However, Morgan Stanley analysts stated that the latest data shows that the net inflow of funds into Bitcoin spot ETF has slowed down, challenging the view that funds will continue to flow into Bitcoin spot ETF in one direction.
Morgan Stanley wrote:
“After the halving, it may fall to $42,000”
Bitcoin will experience a halving in April, when the block reward will be reduced from 6.25 bitcoins to 3.125 bitcoins. Morgan Stanley analysts previously predicted that due to the reduction of mining rewards and the increase in production costs, Bitcoin may fall to around $42,000 after the halving.
In Morgan Stanley’s view, after the halving, the overall network computing power of Bitcoin may decrease by 20%. This is because with the decrease in miners’ profitability, less efficient miners will decide to exit the mining business. Based on an average electricity cost of $0.05 per kilowatt-hour, the estimated median production cost will decrease to $42,000.
Bitcoin mining cost and coin price relationship
However, according to recent historical data, the last time Bitcoin price was “close to or below” the mining cost was during the bear market bottom in 2022, when many mining companies went bankrupt as a result. But during a bull market cycle, the price of BTC is usually much higher than the mining cost.
Although there is usually a small pullback after the halving is completed in history, it is still difficult to say whether it will reach $42,000.
Related Reports
FSC warns of “sharp drop in Bitcoin,” criticizes lack of intrinsic value, and calls for lower deposit risks.
Is it time to buy Bitcoin near 60,000? Analyst: It’s too early, both spot ETF funds and retail trading sentiment are declining.
The plunge continues! Bitcoin drops below 61,500, hitting a two-week low, and more than 2.2 million people are liquidated, with a value of over $700 million.