JPMorgan sees bitcoin support near $77,000, remains ‘positive’ on crypto in 2026

JPMorgan’s estimated bitcoin production cost — which has historically served as a “soft price floor” or support level — has fallen to $77,000 from $90,000 at the start of the year as network hashrate and mining difficulty recently declined.

However, a rebound is expected ahead. “The decline in mining difficulty provides relief to remaining miners, enabling more efficient miners to capture the market share lost by higher cost miners forced offline, thus preventing a spiralling lower in bitcoin production costs. Indeed, we already see a rebound in the hashrate, pointing to a potential increase in mining difficulty and bitcoin production cost at the next network difficulty adjustment,” JPMorgan analysts led by managing director Nikolaos Panigirtzoglou said in a Wednesday report.

The recent decline in bitcoin’s network hashrate triggered the steepest drop in mining difficulty since China’s 2021 mining ban, bringing the cumulative decline in difficulty to about 15% year to date, the analysts noted.

Mining difficulty adjusts roughly every two weeks to keep bitcoin’s average block time near 10 minutes, meaning a drop in hashrate automatically leads to lower difficulty.

The analysts pointed to two main reasons behind the decline. First, bitcoin’s price drop this year made mining unprofitable for higher-cost operators, particularly those using outdated equipment or facing high energy costs, prompting them to switch off machines.

Second, severe winter storms in the United States, especially in Texas, forced large mining operations offline as grid operators curtailed electricity to conserve power.

Historically, significant drops in mining difficulty signal “capitulation” and are often associated with higher-cost miners being forced to sell their bitcoin holdings to cover operational costs, the analysts said. For example, China’s ban on bitcoin mining in 2021 forced miners to shut down operations and relocate infrastructure, resulting in a roughly 45% drop in mining difficulty from May to July 2021, the analysts added.

“The bitcoin mining difficulty eventually recovered by the end of that year. In the current juncture, certain high-cost miners have been selling their bitcoins to stay afloat/fund daily operations, or to reduce debt or to pivot to AI. This selling of bitcoins by miners amplified YTD bitcoin price pressures, but we believe that the exiting of higher cost miners has stabilized,” the analysts wrote.

Lower mining difficulty is also providing relief for miners still operating. With fewer competitors, each unit of hashpower has a better chance of earning block rewards, improving profitability for more efficient miners and allowing them to capture market share from those forced offline, according to the analysts. “Indeed, we already see a rebound in the hashrate, pointing to a potential increase in mining difficulty at the next network difficulty adjustment,” they said.

‘Positive in crypto markets for 2026’

Overall, the JPMorgan analysts remain optimistic about crypto markets this year.

“We are positive in crypto markets for 2026 as we expect a further rise in the digital asset flow, but more led by institutional investors rather than retail investors or digital asset treasury companies,” the analysts led by Panigirtzoglou said in a separate report titled Alternative Investments Outlook and Strategy, published Monday. “The rebound in institutional flows we project for 2026 is likely to be facilitated by the passage of additional crypto regulations such as the Clarity Act in the US.”

The analysts also reiterated their long-term bitcoin target of $266,000 based on a volatility-adjusted comparison to gold, “once negative sentiment is reversed and once bitcoin is again perceived equally attractive to gold as a potential hedge to a catastrophic scenario.”

Bitcoin is currently trading at around $65,660, down more than 1% over the past 24 hours, according to The Block’s BTC price page.

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