Bitcoin Correction Deepens, but Analysts Reject Cycle-Peak Fears

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• ETF and corporate demand absorbed nearly all long-term holder selling.
  
• Institutional ownership continues to rise, adding market stability.
  
• Analysts view the pullback as an opportunity, not a cycle top.

Bitcoin’s recent pullback has sparked anxiety across the market, but analysts at Bernstein argue the move is far from a cycle-ending collapse. Instead, they see a normal correction — shallow, orderly, and supported by steady institutional demand.

A Correction Driven by Cycle Anxiety

Bitcoin’s drop from its October all-time high near $126,000 has revived fears tied to the asset’s familiar four-year pattern. After major peaks in 2013, 2017, and 2021, many investors expect late-cycle weakness in 2025 and are selling in anticipation. Bernstein’s team says that mindset is creating a self-fulfilling dip, not signaling a true top.

The research firm notes that long-term holders have sold roughly 340,000 BTC over the past six months. But the market absorbed nearly all of it through inflows into spot ETFs and corporate treasuries — a sign of a stronger and more balanced market structure than previous cycles.

Institutional Ownership Is Changing the Market

Bitcoin ETFs now control $125 billion in assets, with institutional ownership rising from 20% to 28% in under a year. Even with modest outflows, that shift suggests stability, not panic. Bernstein argues this “higher-quality ownership base” lowers the risk of deep drawdowns.

One lingering concern has been Strategy (formerly MicroStrategy). Despite its share price hovering near its bitcoin value, the firm says it has no plans to sell. With $61 billion in bitcoin against $8 billion in debt, analysts describe Strategy’s position as conservative, not pressured. They even expect the company to keep accumulating during the downturn.

Macro Tailwinds Still Support the Cycle

Bernstein sees broader structural forces supporting digital assets: strong political backing from the Trump administration, expected progress on U.S. market-structure legislation, and improving liquidity as rates drift lower.

Also Read: Corporate Bitcoin Holdings Surge to New Highs as Experts Defend Network Decentralization

Crypto-linked companies are also outperforming, with Coinbase, Robinhood, Figure, and Circle all posting stronger-than-expected earnings — a sign that tokenization and stablecoins remain central themes of this cycle.

A Temporary Reset, Not a Market Top

The firm’s view is clear: this does not feel like a cycle peak. Bitcoin may test support near $80,000, but analysts see the pullback as an opportunity rather than a warning. For long-term investors, the path ahead still appears defined by growing institutional participation, not fading momentum.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.