Bernstein: The recent decline in the crypto market reflects a short-term correction, not a sign of weak fundamentals.

PANews reported on November 17th that, according to The Block, analysts at Bernstein Research stated that Bitcoin has fallen about 25% since reaching its all-time high of approximately $126,000 on October 6th. This marks a short-term correction rather than the start of a major downtrend. The decline reflects investor concerns about historical four-year cycle patterns; however, current market fundamentals are stronger, with a significant absorption of long-term holders' supply, suggesting it may simply be a "shallow pullback" to a new local bottom. The institutional holdings in Bitcoin ETFs have risen from 20% at the end of 2024 to 28% currently. Despite $3 billion in outflows from ETFs over the past three weeks, total assets under management still reach $125 billion. This shift reflects a "higher quality and more stable holding structure," reducing the likelihood of a large sell-off.

Regarding concerns about Strategy's potential sale of Bitcoin, analysts stated that its management has confirmed it will not sell, noting that the company maintains a conservative leverage ratio, with $8 billion in debt secured by its $61 billion Bitcoin holdings, and its dividends are "fully covered by its cash reserves," with further funding available through market offerings. Furthermore, the Trump administration's strong support for cryptocurrencies, the potential for related legislation, the favorable environment created by declining interest rates, and increased institutional participation in tokenization and stablecoins all contribute to the positive outlook. Analysts believe the current market is not at a cyclical peak, and they are watching to see if Bitcoin can find a bottom near the $80,000 range seen after last year's US presidential election, suggesting that the current pullback may provide an attractive entry point for digital assets and crypto stocks.