Bitcoin and broader crypto markets 'have bottomed', says Bernstein analyst
Bitcoin (BTC-USD) hovered above $91,000 per token on Tuesday as recent momentum sparked optimism that the brutal fourth quarter sell-off may be behind it.
'We believe with reasonable confidence that Bitcoin and broader digital asset markets have bottomed," analyst Gautam Chhugani and his team said in a note on Tuesday, pointing to $80,000 in late November as the bottom.
Concerns that the October high north of $126,000 marked the peak in a historical four-year cycle for the token are overstated, Bernstein said, as the industry goes through a "digital assets revolution" that extends the bull run.
Read more: How to navigate a crypto meltdown: 'Be willing to hold on’
"As we have highlighted earlier, we believe the market concern on the 4-year cycle pattern is unwarranted in the current market context, where institutional demand is driving adoption," the analysts said.
Bernstein maintained its forecast that the token will hit $150,000 in 2026 and $200,000 in 2027.
Chhugani points out that despite bitcoin's 6% decline in 2025, the year was positive for crypto-related stocks and IPOs.
Looking ahead, a tokenization "supercycle" led by highfliers Robinhood (HOOD), Coinbase (COIN), Figure (FIGR), and Circle (CRCL) will continue to drive institutional adoption and lift the crypto sector.
Bitcoin prices have rebounded to start 2026 after trading in a tight range in recent weeks following sell-offs in the fourth quarter of last year.
Forced liquidations and selling by long-term holders pushed prices down as much as 35% from their October highs.
On Sunday, 10X Research noted technical indicators signaled "Bitcoin has entered a bullish trend."
The cryptocurrency ended December down for a third consecutive month, a pattern seen only 15 times historically, often setting up the token for January gains.
“There is a good opportunity for a tactical rally,” said Sean Farrell, head of digital assets at Fundstrat, on Monday night.
Farrell points to the Federal Reserve’s balance sheet expansion and a drawdown in the Treasury General Account (TGA), similar to the US government's checking account, as positive signs for bitcoin.
“We have liquidity improving, flows improving, and we’ve finally seen a couple of days of outperformance versus equities,” said Farrell.
The strategist sees a scenario where bitcoin could test the $105K–106K level, though his base case still calls for a significant drawdown in the first half of this year before a rally into the end of 2026.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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