Bitcoin has fallen 25% from its peak. Is this a correction or the end of a cycle?
Experts have assessed the fundamental picture of the crypto market and identified a key level for a successful entry into cryptocurrencies. 
RBC-Crypto does not provide investment advice; this material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
Bitcoin's roughly 25% decline from its October high of $126,000 does not signal the start of a new, protracted downtrend, according to analysts at brokerage firm Bernstein. In a client advisory, they describe the current decline as a correction driven by investor concerns about the crypto market's historical four-year cycle, which saw previous price peaks in the fall of 2013, 2017, and 2021.
According to analysts, many participants have begun to lock in profits in advance in anticipation of a repeat of past years' scenarios, which in itself increases pressure on the price and turns expectations into a “self-fulfilling prophecy.”
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The authors of the review disclosed that they hold long positions in a number of cryptocurrencies. At the time of their report's publication, Bitcoin is trading at the level seen in early 2025, but is almost six times higher than it was in November 2022, when the price bottomed out after the FTX exchange crash and a new market cycle began.
Bernstein analysts believe the current market condition is fundamentally stronger than in previous downturns. They believe this is a “relatively shallow correction” with a new local bottom forming, rather than a full-blown 60-70% collapse, as seen in previous cycles.
They draw this conclusion based on the volume of Bitcoin transfers from long-term holders to new investors: over the past six months, approximately 340,000 BTC (approximately $38 billion) have been sold, most of which was absorbed by the $34 billion influx into spot ETFs and corporate reserves of public companies.
According to Bernstein, institutional investors' share of US Bitcoin ETFs has grown from 20% at the end of 2024 to 28% now. Assets under management for these ETFs have reached $125 billion, despite an outflow of $3 billion over the past three weeks. Analysts believe this trend reflects a “more stable and high-quality ownership structure,” reducing the risk of a deeper correction.
Bernstein analysts also commented on market concerns about potential Bitcoin sales by Strategy (MSTR on NASDAQ), whose market capitalization has recently approached the value of its crypto assets (mNAV ratio less than or equal to one). The analysts emphasized that Strategy's management has repeatedly stated that it has no plans to sell Bitcoin, even if the price continues to decline. The company's debt level is estimated to be moderate—$8 billion versus $61 billion in Bitcoin—and dividends, according to the analysts, are “well-funded” by its own reserves and access to additional financing through share issuance. Bernstein expects Strategy to continue buying Bitcoin even during the current correction.
Strategy is the largest corporate holder of Bitcoin, with the latest official data showing it holds 641,692 Bitcoin with an average purchase price of $74,079.
Among the long-term growth drivers, analysts highlight political support for the crypto industry from the Trump administration, the expected passage of the Clarity Act market infrastructure bill by the end of 2025 or early 2026, and favorable liquidity conditions amid lower Fed rates.
Analysts believe that strong quarterly results from crypto companies like Coinbase, Robinhood, Figure, and Circle, all of which beat forecasts, confirm institutional investors' continued interest in tokenization and stablecoins. They cite these trends as the two main trends in the current stage of market development.
Experts believe the current market situation does not point to a price peak, but rather fits into a long-term trend with active institutional participation and periodic moderate corrections. Bernstein is monitoring whether Bitcoin can hold around $80,000, where it traded after last year's US presidential election. They believe the current decline could be an opportune moment to enter cryptocurrencies or crypto stocks.
Source: cryptonews.net
