Bitcoin Decline a Blip on Way to Higher Prices, Say Analysts

Bitcoin was laboring around $61,300 as of late Wednesday. The largest cryptocurrency is a long way from its all-time high of $75,830, set about two months ago.

That’s a dramatic — though not unfamiliar decline for bitcoin. But some market observers believe the current pullback is healthy. They feel it was needed after the digital currency took off on a torrid pace following the launches of spot ETFs in the U.S. In what could be encouraging for equity-based crypto ETFs like the Amplify Transformational Data Sharing ETF (BLOK), some analysts believe bitcoin will soon snap out of its funk and resume its bullish ways.

Such supporters include Bernstein analysts Gautam Chhugani and Mahika Sapra. Earlier this year, the research firm noted it’s possible bitcoin ascends to $150,000 by the end of 2025. The analysts recently reiterated that view. They noted the cryptocurrency’s bullish ways — while hard to see right now — are far from exhausted.

BLOK Could Be Interesting Bet on Bitcoin Rebound

The actively managed BLOK is home to an assortment of crypto-correlated stocks. That likely explains why the fund scuffled over the past month. Yet a significant portion of BLOK’s roster is levered to bitcoin’s swings. That confirms the fund could be an alternative for investors looking for somewhat conservative exposure to the crypto space.

Up more than 5% for the week ending May 8, BLOK may already be signaling a crypto rebound is forming. Or, at the very least, that bitcoin’s risk/reward has turned more favorable.

“We feel even better about that call. And bitcoin metrics indicate a healthy cycle, still in its early stages,” wrote the Bernstein analysts. “Risk-reward here remains attractive.”

They added that bitcoin’s recent flirtation “cleaned up the excess leverage on futures contracts on crypto exchanges.” That could be a sign that some of the more speculative trades that are often found in the crypto universe are back on the sidelines.

Speaking of the sidelines, that’s exactly where some bitcoin bears could be forced to head if the digital currency reclaims $72,000, according to some technical analysts. That’s a way’s off from where bitcoin currently resides.  But should the cryptocurrency get there, BLOK could respond in a positive fashion. As for the aforementioned spot bitcoin ETFs, those funds could also be a source of upside for crypto-correlated stocks.

“The Bernstein analysts also cited strong overall inflows into ETFs over the past three months, new encouragement for corporate treasuries to buy bitcoin, steady post-halving hash rate, healthy post-halving transaction fees and subdued prices for bitcoin mining equipment as healthy signs for the overall bitcoin market,” reported Adam James for The Block.

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