Analysts across Wall Street and the crypto industry are increasingly convinced the bitcoin bottom is in, as fears from late 2025 fade and risk appetite returns.
Bernstein and Coinbase views align on a market trough
Research firm Bernstein now argues that Bitcoin and the broader crypto market have likely already bottomed, marking a sharp turn from the $50,000–$60,000 downside targets dominating sentiment in late 2025. Moreover, the shift suggests institutional investors are reassessing their defensive stance.
Adding to that conviction, Morgan Stanley filed S-1 applications for both a Bitcoin ETF and a Solana ETF this week, while also introducing an Ethereum Trust to its internal crypto product lineup. However, the bank has yet to provide a detailed launch timeline.
A Coinbase analyst outlined the improving backdrop in a recent Scott Melker discussion often cited as a key coinbase analyst interview for early 2026. “We have broken out of that 80 to 85 range where we actually said that is a good place for people to accumulate here,” the analyst said, pointing to renewed upside momentum.
December weakness driven by technical pressures
The sharp December drawdown that rattled traders was primarily the result of tax-loss harvesting impact and options expiry flows, rather than any new fundamental shock. On-chain data and positioning show selling pressure peaked into year-end, then faded as calendar effects reversed.
“On a dime on December 31st you saw a lot of that change,” the Coinbase analyst noted, underscoring how quickly sentiment turned as the calendar flipped to 2026. Moreover, the speed of the reversal supports the view that structural demand remains intact.
Spot Bitcoin ETF activity has reinforced that narrative. After a brief dip, spot bitcoin etf inflows have rebounded, indicating that the December weakness was seasonal and technical. That said, some analysts still caution that volatility could return around future expiry clusters.
Wall Street banks respond to BlackRock’s lead
Morgan Stanley‘s latest ETF filings highlight intensifying wall street crypto pressure as major banks race to keep pace with BlackRock‘s early lead in crypto funds. Moreover, executives appear increasingly unwilling to cede the market to a handful of asset managers.
“You cannot have your biggest client like BlackRock coming in and saying we are going into crypto and you do not have a plan,” the Coinbase analyst explained. The comment underscores how client expectations are now forcing banks to accelerate their digital asset strategies.
Strategy’s success with its large Bitcoin holdings, along with BlackRock’s rapid ETF asset growth, has further raised the bar for competitors. However, regulatory timelines and internal risk frameworks still limit how fast some institutions can move.
Altcoin early strength signals growing risk appetite
Major altcoins are already benefitting from the improving backdrop. ETH, Solana and XRP have all outperformed Bitcoin in the opening weeks of 2026, a pattern some analysts describe as altcoin early strength following months of consolidation.
Capital is rotating into riskier tokens now that Bitcoin enjoys clearer regulatory treatment via ETFs and trust structures. Moreover, that rotation is often seen in prior cycles once investors grow more confident that the bitcoin bottom is behind them and liquidity conditions are improving.
Analysts at Bernstein and other research houses interpret this outperformance as a healthy sign for the broader digital asset market. That said, they warn that smaller-cap assets could still face sharp pullbacks if macro conditions deteriorate later in the year.
Macro and political risks still linger
Despite the constructive near-term setup, the Coinbase analyst remains cautiously optimistic rather than outright euphoric. The outlook is described as bullish through Q1 and into early Q2, but with increasing uncertainty beyond that horizon.
“My visibility kind of ends around the April–May area to be honest with you,” the analyst admitted, flagging policy risk as a key variable. Moreover, upcoming U.S. midterm elections could reshape the legislative agenda around digital assets and capital markets.
In parallel, potential supreme court tariff rulings and other trade-related decisions may influence global risk sentiment and dollar liquidity, indirectly impacting crypto valuations. However, many investors appear willing to look through those risks for now, focusing instead on supply dynamics and institutional adoption.
Outlook: constructive, but not complacent
The emerging consensus from Bernstein, Morgan Stanley and Coinbase is that the market has likely moved past its most recent cyclical low, with structural demand visible in ETF flows and institutional product launches.
However, analysts stress that even if a durable trough is in place, crypto remains a high-volatility asset class exposed to policy shocks and macro surprises. For now, though, the combination of renewed inflows, Wall Street engagement and altcoin resilience is giving the bulls the benefit of the doubt.
Source: https://en.cryptonomist.ch/2026/01/08/bitcoin-bottom-etf-push/
