Bernstein: Bitcoin’s 25% Pullback Is a Phase Correction, Not a Bull Market Peak
Bernstein analysts argue that Bitcoin’s recent 25% drop—from an all-time high of $126,000 to about $93,000—is a healthy market correction rather than a cycle peak. They attribute the sell-off mainly to profit-taking ahead of the 2025 fourth-year “halving cycle” pattern, but emphasize that today’s fundamentals differ sharply from past cycles. Over the past six months, long-term holders sold roughly 340,000 BTC, yet strong bids from spot ETFs and corporate treasuries absorbed nearly all supply. Institutional holdings in spot Bitcoin ETFs have risen from 20% at the end of 2024 to 28% today, with assets under management at $125 billion. Even after $3 billion of outflows in three weeks, ETFs maintain a stable base of “higher-quality” investors. Bernstein also dispels fears of a MicroStrategy sell-off: the company’s management has pledged not to sell any BTC and may even increase its position. Structural tailwinds—including U.S. political support, pending crypto legislation, and a global rate-cut cycle—remain intact. Analysts see Bitcoin finding a new bottom between $80,000 and $90,000 before resuming its uptrend.
Bullish
Bernstein’s assessment is fundamentally bullish: it reframes a 25% pullback as a transient correction rather than a cycle peak. Unlike previous halving cycles that triggered 60–70% crashes in year four, this sell-off has been absorbed by high-quality institutional demand, chiefly from spot ETFs and corporate treasuries. MicroStrategy’s pledge not to sell—and its likely additional buys—further underpins demand. Structural tailwinds such as U.S. political support for crypto, upcoming clarity legislation, and a global easing cycle bolster long-term prospects. Historically, Bitcoin corrections of this magnitude during bull runs have preceded renewed rallies. In the short term, traders can expect choppy price action around the $80,000–$90,000 support zone. Over the medium to long term, the strengthened holder base and growing ETF flows suggest that Bitcoin is poised to resume its upward trajectory, making this pullback a potential accumulation opportunity.