Bernstein predicts Bitcoin will bottom at $60,000 amid current market downturn, with recovery expected by 2026.
Analysts at Bernstein predict that the current downturn in the cryptocurrency market will reverse by the first half of 2026. They estimate that Bitcoin will reach a low around $60,000 before a recovery begins.
As of February 2, Bitcoin's price dipped below $75,000 but has since bounced back to approximately $79,000, still nearly 38% below its record high of $126,080 from October. The cryptocurrency has faced a decline for four consecutive months, with January marking its worst start to the year in five years, according to CoinGlass.
Bernstein attributes the recent price decline largely to Bitcoin lagging behind gold's performance, with the market cap of Bitcoin now at just 4% of gold's, approaching a two-year low. Gold prices have surged, bolstered by significant accumulation from central banks in China and India, and are expected to constitute about 29% of global reserves by the end of 2025.
The analysts linked Bitcoin's correction to the growth witnessed during the "institutional cycle," which has seen assets under management rise to around $165 billion over the last two years, alongside the establishment of numerous corporate Bitcoin treasuries. They believe that financial institutions will continue to engage in cryptocurrency, as recent outflows from exchange-traded funds represent only a small portion of total assets, and miners are not capitulating.
U.S. policy dynamics are also seen as influencing Bitcoin's trajectory, particularly with the potential creation of a strategic crypto reserve from confiscated assets and the possible appointment of Kevin Warsh as head of the Federal Reserve. Bernstein views the current weakness in the digital currency market as a late-stage correction rather than the start of a prolonged downturn, predicting that the volatility will persist in the short term but set the stage for a significant cycle for Bitcoin in 2026.
Potential for Further Decline
Meanwhile, Bloomberg Intelligence's Mike McGlone has suggested that Bitcoin could plummet to $10,000 this year, with $50,000 being the initial target. He anticipates increased volatility across major assets in the coming months, describing 2026 as a "trader's paradise" reminiscent of the market conditions in 2000-2001 and 2008.
Kraken's economist Thomas Perfumo remarked that Warsh's potential Fed chair appointment sends mixed signals for Bitcoin, noting that while he may support lowering interest rates, he is skeptical about expanding liquidity, which could impact digital assets negatively. Similar sentiments were echoed by Nick Pakrin, co-founder of Coin Bureau, who highlighted concerns regarding Warsh's views on the Fed's balance sheet and its potential effects on risk assets and precious metals.
Analysts at QCP Capital noted a risk-off sentiment in the markets following Warsh's recent comments, which extended even to safe-haven assets. Bitcoin managed to stabilize above the key level of $74,500, but a sustained decline below $74,000 could heighten the risk of a drop into the price range seen in 2024, according to their analysis. Institutional flows and Warsh's stance are considered crucial indicators for the crypto market's future.
Additionally, Cantor Fitzgerald has suggested that digital assets may be entering a prolonged decline, with some market participants speculating about a transition into an "extremely bearish" phase.
