According to Bernstein analysts, the recent drop in bitcoin is explained by a collective reflex linked to the quadrennial peak myth, while market conditions remain strong due to institutional flows.
ETFs Absorb Long-Term Sales And Strengthen Market Floor
Spot ETFs are absorbing almost all long-term sales with over $125 billion under management and a more stable investor base, reinforcing the market floor.
Strategy continues to accumulate BTC with a healthy financial position, while the American political and macro context supports the expansion of the crypto ecosystem.
The current dynamics reflect a simple consolidation driven by strong institutional investors, potentially creating interesting entry points around key technical thresholds.
The approximately 25% drop in bitcoin since its peak on October 6 is not a major turnaround, according to Bernstein. It is part of an anticipation dynamic where investors, obsessed with the idea of a new quadrennial peak, sell out of reflex rather than conviction. The 2013-2017-2021 history fuels a now firmly entrenched psychological pattern: the fourth quarter is ‘where the cycle turns’. The result: a self-fulfilling correction.
Yet, market conditions paint a different picture. The scale of the consolidation is far from the 60 to 70% drops of past cycles. The absorption of long-term supply explains much of it: about 340,000 BTC, or $38 billion worth of tokens held for at least a year, have been sold in the last six months, nearly entirely offset by some $34 billion inflows into Spot ETFs and corporate treasuries.
The Institutional Flows as Shock Absorbers
Bitcoin ETFs now have $125 billion in assets under management, with the institutional share rising from 20% in late 2024 to 28% today. Even the recent $3 billion outflows have not altered this new market composition, more controlled by patient capital players. This upgrade in holders strengthens the market floor and reduces the chances of a massive capitulation.
Strategy Remains a Buyer, Not a Seller
Concerns surrounding Strategy (formerly MicroStrategy) add to the prevailing nervousness, as the stock trades slightly below the value of its bitcoin reserves. The management has reiterated that no sales are planned. The group holds $61 billion in BTC against $8 billion in debt, a leverage widely controlled. Dividends are secure, and the company retains the option to access capital through its ATM programs.
Saylor has also announced a new purchase of over $800 million in bitcoin over the past week.
Structural Tailwinds Still in Place
The American political context favors the sector, with the Trump administration making digital assets a strategic focus. The Clarity Act on market structure should progress between late 2025 and early 2026, while monetary easing enhances overall liquidity. In the listed ecosystem, the strong results of Coinbase, Robinhood, Figure, or Circle confirm institutional interest in tokenization and stablecoins, presented as the two main driving forces of this cycle.
A Correction That Opens Entry Points
The market does not appear to have reached its cyclical peak.
Bernstein emphasizes that the market does not exhibit characteristics of a cycle peak but rather a breather in a multi-year trend dominated by institutional flows. The $80,000 threshold, observed after the American election, will serve as a reference point to identify a sustainable floor. The current consolidation could offer attractive entry points, both on digital assets and companies exposed to the sector.
