A 25% drop in bitcoin was a 'correction' and the trend is still upward, says manager.

Source: Exame Original Title: The 25% drop in bitcoin was a 'correction' and the trend is still bullish, says manager Original Link: https://exame.com/future-of-money/queda-de-25-do-bitcoin-foi-correcao-e-tendencia-ainda-e-de-alta-diz-gestora/ The manager Bernstein stated that the intense decline of bitcoin, accumulating losses of 25% since its last record in October, is a “correction,” and not a more prolonged loss movement. For analysts, the cryptocurrency still has room to rise further over the next few months.

The last record of the cryptocurrency was registered on October 6, when the asset reached a price close to $126,000. However, since then, the digital currency has accumulated negative performance, particularly highlighting a sharp decline in recent days. Currently, it is trading below $100,000.

Despite the unfavorable picture, Bernstein remains optimistic. The manager assesses that investors are behaving with “anxiety” regarding the historical pattern of four-year cycles in the price of bitcoin, observed in 2013, 2017, and 2021. The big mystery this time is the “peak” of the asset in the cycle.

The manager's assessment is that many retail investors are selling their cryptocurrencies because they believe the asset has already reached its price peak. As a result, the cryptocurrency faces a “self-fulfilling prophecy” that ultimately drives down the asset's price.

But Bernstein's view is that the fundamentals of bitcoin remain strong, indicating that the recent drop would be a “relatively shallow” price correction. The 25% drop in the last month is significantly less than losses observed in the historical cycles of the asset, which reached 60% and 70%.

The manager highlights that a good portion of the sales in recent months were made by long-time cryptocurrency investors, but that the movement was observed through purchases by companies and ETFs. As a result, the degree of depreciation of the asset turned out to be less than in the past.

The report also pointed out that Bernstein believes the October record “was not a price peak of the cycle,” indicating the projection that bitcoin will be able to rise again in the short term due to new structural conditions that create a more sustained demand for the asset.

In this scenario, the recent drop in the cryptocurrency would be yet another of the “recurring corrections” that the asset faces in 2025, placing the digital currency at a potentially attractive and advantageous price level for investors interested in starting to invest in the asset.