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Bernstein "Bitcoin 25% drop, a short-term correction not a 'cycle peak'"

Son Min

Summary

Bernstein diagnosed that the recent 25% decline in Bitcoin prices is a short-term correction rather than a shift to a long-term bear market.
The report evaluated that ETF and corporate buying demand has absorbed a significant portion of long-term holders' selling, and said the likelihood of large-scale selling by major investors such as Strategy is low.
It stated that structural bullish factors such as the U.S. government's pro-digital-asset policy and rate cuts remain valid, and emphasized that this correction could act as a buying opportunity.

Bitcoin (BTC) prices have fallen about 25% from last month's record high, but analysts say this is a short-term correction rather than a shift to a long-term bear market.

On the 17th (local time), according to The Block, research and brokerage firm Bernstein said in a report that the recent Bitcoin sell-off is a short-term correction driven by concerns about four-year cycle peaks. The report explained that investors' preemptive profit-taking, mindful of the fourth-quarter peak patterns seen in 2013, 2017, and 2021, is a major factor behind this correction.

It also assessed that this decline is a "gradual correction phase" rather than a structural bear market like the 60~70% crashes seen in previous cycles. The rationale is that roughly 340,000 BTC sold by holders who had held for more than a year over the past six months has been largely absorbed by ETF and corporate buy-side demand.

The report also drew a line under the possibility of Strategy selling Bitcoin, which had been raised by some market participants. It explained that Strategy holds about $61 billion worth of BTC, has about $8 billion in liabilities, carries low leverage burden, and maintains its ability to raise capital. The report assessed that Strategy may continue to add purchases even during the adjustment phase.

Bernstein analyzed that structural bullish factors remain valid, including the U.S. government's pro-digital-asset stance, the prospect of the Clarity bill passing this year or in early 2026, and a rate-cutting cycle. Strong third-quarter results from major publicly listed crypto firms such as Coinbase, Robinhood, Figure, and Circle were also interpreted as part of increased institutional participation.

The report emphasized that the current market situation "does not appear to be a cycle peak phase," and noted the possibility that Bitcoin could re-form a bottom in the low $80,000 range it reached after the U.S. presidential election. It added that this correction "could provide buying opportunities for crypto assets and related stocks."

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