Analysts at Bernstein have identified the recent drop in Bitcoin (BTC) prices as a ‘crisis of confidence’ rather than a typical bear market. Despite Bitcoin's significant decline of about 44% from its all-time highs, Bernstein’s Gautam Chhugani argues that the fundamentals of Bitcoin remain strong. He emphasizes that this downturn does not carry the usual warning signs of a severe crash, such as institutional collapses or hidden leverage exposure.

In a note to clients, Bernstein portrayed the current Bitcoin bear case as the weakest in its history. They maintained a bullish long-term price target of $150,000 for Bitcoin by the end of 2026. The analysts believe that the market is currently burdened by negative sentiment, despite favorable broader conditions. They pointed out ongoing institutional support for Bitcoin, including a pro-Bitcoin US president and the growth of spot Bitcoin exchange-traded funds (ETFs).

Bernstein argues that these elements differentiate the current cycle from previous downturns driven by excessive risk. They also tackled the narrative that Bitcoin is becoming irrelevant as global interest shifts toward artificial intelligence (AI). The analysts dismissed such claims as mere changes in investor focus rather than real threats to Bitcoin's standing.

Moreover, fears related to quantum computing were downplayed, as Bernstein noted that these risks would impact all digital systems, not just Bitcoin. They also addressed concerns about forced selling from corporate treasuries or miner capitulation, stating that major companies have structured their finances to endure extended downturns.

The analysts concluded that only extreme scenarios would force companies to restructure their Bitcoin holdings. They added that miners are better equipped than in previous cycles, diversifying their revenue streams and easing production costs by reallocating resources toward AI data centers. As Bitcoin trades at $70,627, having lost 20% over the past two weeks, Bernstein's outlook remains optimistic despite current market conditions.