Bitcoin (BTC-USD) hovered above $91,000 a coin on Tuesday, with recent momentum fueling optimism that the brutal fourth quarter sell-off may be behind it.
Analyst Gautam Chhugani and his team said in a report on Tuesday that “we are reasonably confident that Bitcoin and the broader digital asset market have bottomed,” pointing to $80,000 at the end of November as the bottom.
Bernstein said concerns that October’s high above $126,000 marked the peak of the token’s historical four-year cycle are overblown as the industry undergoes a “digital asset revolution” that extends the bull run.
Read more: How to Cope with a Cryptocurrency Crash: ‘Be Willing to Hold On’
“As we have highlighted previously, we believe market concerns about a four-year cyclical pattern are unfounded in the current market context as institutional demand is driving adoption,” the analysts said.
Bernstein maintained its prediction that the token price will reach $150,000 in 2026 and $200,000 in 2027.
Chhugani noted that although Bitcoin fell 6% in 2025, the year was positive for crypto-related stocks and IPOs.
Looking ahead, the tokenization “supercycle” led by ambitious Robinhood (HOOD), Coinbase (COIN), Figure (FIGR), and Circle (CRCL) will continue to drive institutional adoption and boost the cryptocurrency industry.
Following a sell-off in the fourth quarter of last year, Bitcoin prices have been trading within a narrow range in recent weeks, setting off a rebound in 2026.
Forced liquidation and selling by long-term holders has driven prices down 35% from October highs.
On Sunday, 10X Research noted that technical indicators suggest “Bitcoin has entered a bullish trend.”
The cryptocurrency ended December with its third consecutive monthly decline, a pattern that has only occurred 15 times in history and typically sets the stage for a rally in January.
“This is a good opportunity for a tactical rebound,” Sean Farrell, head of digital assets at Fundstrat, said late Monday.
Farrell pointed to the expansion of the Federal Reserve’s balance sheet and the drawdown of the Treasury General Account (TGA), which is similar to the U.S. government’s checking account, as positive signs for Bitcoin.
“Our liquidity has improved, our flows have improved, and we’re finally seeing several consecutive days of outperforming stocks,” Farrell said.
The strategist believes Bitcoin could test $105,000 to $106,000 levels, but his base case still calls for a sharp retracement in the first half of the year before a rebound in late 2026.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X: @ines_ferre.