Analytical data from Bernstein indicates that Bitcoin's current bear market has seen a peak decline of approximately 54% from its cycle high of around $125,000 in October 2025. This correction is notably milder compared to the severe 75% to 90% drops observed at the conclusion of previous bear markets.
A team of analysts led by Gautam Chhugani stated in a client report released on Monday that the leading cryptocurrency has rebounded from a recent low near $60,000, with its price recovering to around $63,000. As of July 6, Bitcoin was quoted at approximately $62,600, marking a daily decline of 1.02%.
Bernstein interprets this more moderate downturn as a sign of the cryptocurrency industry's maturation, while cautioning that it is still too early to definitively declare the market has fully emerged from the downward cycle.
The report notes that the current decline from the cycle peak has persisted for three quarters. Historically, Bitcoin bear market correction periods typically last between 12 to 15 months, suggesting the current duration has not yet met that benchmark.
Capital Flows Appear More Stable Than Market Sentiment
According to Bernstein's statistics, the combined net capital inflow from corporate treasury holders, asset allocators, and spot Bitcoin ETFs reached $10 billion in 2026. This figure represents a significant contraction from the $60 billion scale seen in 2025.
Spot Bitcoin ETFs have experienced an overall net outflow of $5.5 billion year-to-date, with their total assets under management standing at $74 billion. This implies that corporate treasury holders, led by MicroStrategy, constitute the sole source of positive capital inflow into the market.
Chhugani's team analyzed that the $5.5 billion outflow from ETFs against a $74 billion existing asset base, coupled with the nearly halved price of Bitcoin, has resulted in market pessimism that far exceeds the actual deterioration in capital fundamentals.
Analysts noted that despite a significant global liquidity shift towards AI-related stocks, Bitcoin has managed to maintain an overall net capital inflow for the year, suggesting its underlying fundamentals have not weakened excessively.
MicroStrategy Maintains Net Bitcoin Purchases
Citing company announcements, Bernstein reported that MicroStrategy accumulated approximately 175,000 additional Bitcoins in 2026, investing about $14 billion, bringing its total holdings to 847,363 Bitcoins.
The report addressed previous market concerns that MicroStrategy might be forced to sell its holdings due to financial pressure.
MicroStrategy's core perpetual preferred stock, STRC, has a par value of $100 and a current market price of $87.87. However, the company's balance sheet liquidity reserves are sufficient to cover cash dividends and interest payments for more than the next 17 months.
Bernstein pointed out that MicroStrategy's total debt amounts to only 13% of the value of its Bitcoin collateral. The next principal repayment of approximately $1 billion is due no earlier than the third quarter of 2028. The $15 billion in preferred stock principal constitutes perpetual, long-term capital with no maturity or redemption pressure.
According to MicroStrategy's established capital management rules, the company can sell a maximum of $1.25 billion worth of Bitcoin for purposes such as distributing dividends, paying interest, replenishing USD cash reserves, and executing share buybacks. If the cash reserve coverage period falls below 12 months, any reduction in holdings must be approved by the board of directors.
Based on this constraint mechanism, the probability of MicroStrategy being forced into large-scale, passive Bitcoin sell-offs is extremely low, and it is expected to remain a net buyer in the market.
US-Listed Miners Accelerate Shift to AI, Gradually Exit Mining
The report states that MicroStrategy's ongoing accumulation of Bitcoin is offsetting selling pressure from leading US Bitcoin miners, as these mining firms are transitioning to focus on AI data center operations.
Bernstein predicts that leading US-listed mining companies will completely exit the Bitcoin mining sector. Their share of the global network's hash rate is expected to be taken over by overseas mining entities in regions such as Southeast Asia, Central Asia, and Latin America.
Analyst calculations show that the average Bitcoin network hash rate has cumulatively declined by approximately 11% year-to-date. Over the past two quarters, the hash rate share of US miners has decreased by more than 0.4 percentage points, while the share of miners in emerging markets has increased by about 1 percentage point.
Regulation and Asset Tokenization Progress Continues
Bernstein outlined industry policy developments: work on the details of the US stablecoin-related GENIUS Act is still advancing; Kalshi and Coinbase have launched cryptocurrency perpetual contract products within the US. Relying on data from prediction market Polymarket, the institution assesses the probability of the Clarity for Payment Stablecoins Act passing into law in 2026 is close to 50/50.
The scale of real-world asset tokenization has reached a new historical high, with a total market capitalization of $52 billion.
Acknowledging the depth of the current price correction, Bernstein admitted that its year-end Bitcoin price target of $150,000 is aggressive. However, the firm remains bullish on a subsequent market reversal in this cycle and will continue to monitor Bitcoin's capital flows to identify signals of market recovery.
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