Since its November 2025 cycle peak of approximately $125,000, the cryptocurrency has fallen approximately 54%.
Bitcoin tested recent lows near $60,000 before recovering slightly to around $63,000.
Bernstein analysts led by Gautam Chhugani noted that the current correction has been significantly shallower than previous cycles, which saw declines of 75% to 90%. "While it remains unclear whether we are completely out of the danger zone... this cryptocurrency bear market has proven milder than previous drawdowns," the analysts wrote. Bitcoin treasury holdings and ETFs attracted $10 billion in 2026, up from $60 billion last year. Bitcoin ETFs have seen outflows of $5.5 billion year-to-date from a total asset base of $74 billion, but buying by corporate holders—most notably Strategy—has offset these outflows.
Strategy has weathered the volatility in its STRC preferred shares, which are currently trading at $87.87 with a par value of $100. The company has 17 months of cash reserves to cover dividend and interest obligations, and debt represents only 13% of the value of its Bitcoin collateral.
"It is unlikely that Strategy will experience significant forced Bitcoin offerings—the company remains a net buyer in the market," the analysts noted.
Meanwhile, American Bitcoin miners listed on US exchanges have become net sellers as they shift their focus to AI data center operations, ceding hashrate share to international miners from Southeast Asia, Central Asia, and Latin America. The share of US miners in the global hashrate has declined by more than 40 basis points over the past two quarters.
On the regulatory front, Bernstein highlighted the ongoing development of the GENIUS Act stablecoin framework, as well as the launch of perpetual crypto futures on US platforms, including Kalshi and Coinbase. Meanwhile, passage of the CLARITY Act is still seen as equally likely this year.
Ultimately, "any correction in cryptocurrencies is painful, but this one has been quite encouraging," the analysts concluded. "It feels like the crypto market is maturing." Bernstein maintains a long-term bullish view, but admits that its $150,000 year-end Bitcoin price target "looks ambitious amid a market correction," while still expecting the broader cycle to eventually reverse.