(Bloomberg) -- Bitcoin’s cost of production has dropped from about $24,000 at the start of June to around $13,000 now, which may be seen as a negative for pricing, according to JPMorgan Chase & Co.

The drop in the production cost estimate is almost entirely due to a decline in electricity use as proxied by the Cambridge Bitcoin Electricity Consumption Index, strategists led by Nikolaos Panigirtzoglou wrote in a note Wednesday. They posit that the change is consistent with efforts by miners to protect profitability by deploying more efficient mining rigs, as opposed to a mass exodus by less efficient miners. They also say it could be seen as an obstacle to price gains.

“While clearly helping miners’ profitability and potentially reducing pressures on miners to sell Bitcoin holdings to raise liquidity or for deleveraging, the decline in the production cost might be perceived as negative for the Bitcoin price outlook going forward,” the strategists wrote. “The production cost is perceived by some market participants as the lower bound of the Bitcoin’s price range in a bear market.”

Bitcoin has struggled since hitting a high near $69,000 in November. It’s down about 60% year to date as the Federal Reserve hikes interest rates to combat inflation, risk assets struggle and the crypto industry sustains high-profile blowups like Terra/Luna and Three Arrows Capital. The largest token has been rangebound close to $20,000 for about a month. 

Last month, JPMorgan strategists led by Panigirtzoglou said that sales of Bitcoin by miners could pressure the price into the third quarter as the operations boost liquidity, meet costs and possibly deleverage.

A monthly update from miner Core Scientific Inc. last week showed that it dumped most of its Bitcoin holdings in June. Publicly traded miners have struggled along with digital assets themselves. Marathon Digital Holdings Inc. is down 76% year-to-date, Riot Blockchain Inc. has dropped 78% and Core Scientific has tumbled 86%.

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