Bernstein: BTC’s 25% Drop Is a Correction, Not a Cycle Peak

BTC’s approximate 25% slide from its October all-time high of around $126,000 represents a short-term correction rather than the beginning of a major downturn, according to analysts at research and brokerage firm Bernstein, from The Block.

With as of November 17, 2025, the cryptocurrency has erased its year-to-date gains and triggered widespread concern among investors worried about a repeat of the severe drawdowns viewn in previous market cycles.

However, Bernstein’s research team, led by analyst Gautam Chhugani, maintains that this time is fundamentally diverse.

Why This Correction Differs from Past Cycles

The firm argues that the current backdrop is fundamentally stronger, pointing to a relatively shallow correction rather than the historical 60% to 70% drawdown viewn in previous cycles.

Historical BTC cycle peaks in 2013, 2017, and 2021 were followed by brutal bear markets that wiped out the majority of gains.

Bernstein notes that roughly 340,000 BTC — approximately $38 billion — sold by holders with at least one-year tenure over the last six months has been largely absorbed by about $34 billion of inflows into spot ETFs and corporate treasuries. This absorption of long-term holder supply represents a critical structural shift in the market.

A key factor distinguishing this correction from past cycles is the maturation of institutional participation.

Institutional ownership of BTC ETFs rose from 20% at the end of 2024 to 28% currently, with total ETF assets under management reaching $125 billion despite $3 billion of outflows in the last three weeks.

This shift reflects what Bernstein describes as higher quality and consistent ownership, reducing the likelihood of a deep collapse.

The presence of institutional capital provides a structural floor that didn’t exist in previous cycles when retail investors dominated the market.

MicroStrategy and Corporate Treasury Demand

Bernstein also addressed concerns about (formerly MicroStrategy), which holds the largest corporate BTC treasury in the world.

The firm emphasized that Strategy is trading close to its BTC net asset value with a conservative leverage position and no immediate liquidity pressure.

The analysts expect Strategy to continue purchasing BTC through the current market correction, viewing price fragileness as a purchaseing opportunity rather than a reason to liquidate holdings.

This conviction from major corporate holders provides another layer of support absent in previous cycles.

Market Outlook

Looking ahead, Bernstein’s analysts argued that the market does not feel like a cycle peak but rather part of a multi-year trend defined by institutional participation and recurring, moderate corrections.

BTC remains up approximately 100% over the past three years despite the recent pullback.

The firm views current price levels as presenting an attractive entry point for both cryptocurrency investments and related equity positions.

While short-term volatility may persist, the structural underpinnings of the market appear far stronger than during previous cycle tops.