Bernstein describes the current Bitcoin correction as the weakest ever, emphasizing its fundamental resilience and a bullish price target of $150,000 by 2026.
Analysts at Bernstein have labeled the ongoing Bitcoin correction as the "weakest bear scenario" in the cryptocurrency's history. They attribute the price decline more to a crisis of confidence among investors than to any fundamental flaws in the asset itself.
The firm maintains a bullish long-term outlook, projecting Bitcoin could reach $150,000 by the end of 2026. They observed that typical indicators of a severe market downturn, such as systemic failures or significant bankruptcies, are notably absent this time around.
Support for the market is currently being bolstered by capital investments into exchange-traded funds (ETFs), corporate treasury allocations, and a generally positive political climate in the U.S. regarding cryptocurrencies.
Bernstein addressed several common criticisms regarding Bitcoin's performance:
- Comparison to Gold: Bitcoin is still viewed primarily as a liquidity-sensitive asset rather than a mature safe haven. The ongoing high interest rates are hindering its growth, but the ETF infrastructure is prepared for a potential influx of capital when market conditions improve.
- AI Integration: The blockchain technology underlying Bitcoin is seen as more compatible with a future dominated by autonomous AI agents compared to traditional banking systems.
- Quantum Risks: Although quantum computing poses risks for all forms of digital finance, Bitcoin has the capacity to adapt its protocols through updates.
- Miners' Resilience: Established miners are diversifying their operations to include supporting AI data centers, which helps them endure longer downturns.
Further insights were provided by Glassnode, which found that unrealized losses in the market currently represent approximately 16% of Bitcoin’s total market capitalization. This scenario echoes a similar market structure observed in early May 2022.
Michaël van de Poppe, founder of MN Trading, reinforced these views, noting that the Fear and Greed Index has plummeted to a record low of 5, with the Relative Strength Index (RSI) falling to 15—levels previously only observed during the 2018 downturn and the COVID-19 crash. He expressed skepticism about Bitcoin dropping below $60,000 quickly, anticipating instead a phase of consolidation followed by gradual recovery.
Additionally, the Sharpe ratio, measuring risk-adjusted returns, has fallen to -10, indicating the closing stages of the current bear market, the lowest level since March 2023.
