Bitcoin's Recent 25% Drop Seen as Temporary Correction, Bernstein Analysts Say

​Bitcoin's recent decline of approximately 25% from its October all-time high of $126,000 is not signaling the peak of the market cycle, according to analysts at Bernstein. As of November 17, 2025, the cryptocurrency is trading at $93,000, erasing its year-to-date gains and raising concerns among investors about a potential downturn similar to previous market cycles.

However, Bernstein's research team, led by analyst Gautam Chhugani, asserts that the current correction is fundamentally different from past cycles. They emphasize that the market backdrop is stronger now, pointing out that the recent correction is relatively shallow compared to the historical 60% to 70% drawdowns that typically followed Bitcoin's past peaks in 2013, 2017, and 2021.

Bernstein highlights a significant shift in the market's structure, noting that the selling of 340,000 BTC (about $38 billion) by long-term holders over the past six months has been largely absorbed by $34 billion in inflows into spot ETFs and corporate treasuries. This absorption, coupled with increased institutional participation, is seen as a key factor differentiating the current correction from previous cycles.

One of the most notable changes is the maturation of institutional involvement, with institutional ownership of Bitcoin ETFs rising from 20% at the end of 2024 to 28% today. Bernstein also points to the $125 billion in total assets under management in Bitcoin ETFs, despite recent outflows, as evidence of more stable and consistent ownership, providing a structural floor to the market.

The analysts also addressed concerns surrounding MicroStrategy (now known as Strategy), the company holding the largest corporate Bitcoin treasury. Bernstein believes that Strategy's conservative leverage and lack of immediate liquidity pressures mean it is unlikely to liquidate its Bitcoin holdings during this market correction. In fact, the firm expects Strategy to continue purchasing Bitcoin, viewing the current price weakness as an opportunity to accumulate.

Looking forward, Bernstein concludes that the market does not appear to be at a cycle peak but rather in a multi-year trend characterized by moderate corrections and ongoing institutional participation. Despite the recent pullback, Bitcoin is up approximately 100% over the past three years, and Bernstein sees current price levels as an attractive entry point for both cryptocurrency investments and related equities.