Bernstein: The recent decline in the cryptocurrency market reflects a short-term correction, not a weak fundamentals According to The Block, analysts at research firm Bernstein have stated that Bitcoin has fallen about 25% since hitting a historic high of around $126000 on October 6th, marking a short-term correction rather than the beginning of a major downtrend. The recent decline reflects investors' concerns about the historical four-year cycle pattern, but the current market fundamentals are stronger, with long-term holder supply being heavily absorbed or only experiencing a "shallow pullback" to a new local bottom. The proportion of Bitcoin ETF institutional holdings has increased from 20% at the end of 2024 to 28% currently. Despite the outflow of $3 billion in ETF funds in the past three weeks, the total managed assets still reach $125 billion. This shift reflects a "higher quality and more stable holding structure", reducing the possibility of significant selling. Regarding the concern that Strategy may sell Bitcoin, analysts stated that its management has confirmed that it will not sell, and pointed out that the company's leverage ratio is conservative, with $8 billion in debt secured by $61 billion in Bitcoin holdings, and dividends "fully covered by its capital reserves," and further funding can be obtained through market issuance plans. In addition, the Trump administration's strong support for cryptocurrencies, the expected advancement of related legislation, the creation of a favorable environment for interest rate reductions, and the increased participation of institutions in tokenization and stablecoins all constitute favorable factors. Analysts believe that the current market is not a cyclical peak, and they are concerned about whether Bitcoin can bottom near the $80000 range that emerged after last year's US presidential election. They also believe that the current correction may provide an attractive entry point for digital assets and cryptocurrency stocks.