Share this article
Bernstein: Bounce in Cryptocurrencies Is ‘Mean Reversion’ Rally
The gains are unlikely to foreshadow a sustained advance, a report from the brokerage firm said.
By Will Canny
Updated Jan 23, 2023, 8:03 p.m. Published Jan 23, 2023, 12:45 p.m.
Gains in the crypto market have probably been driven by a reversion to the mean, Bernstein said in a research report Monday, noting that bitcoin (BTC), the largest cryptocurrency by market capitalization, fell more than 65% last year. Mean reversion is a theory used in finance that suggests asset prices tend to revert to their long-term mean or average level.
According to Bernstein, the mean reversion of crypto still has room to run, and so the broker advises caution about being bearish at current levels. Bitcoin in its entire history has never had two consecutive years of negative returns, it added.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Although the implosion of crypto exchange FTX and the bankruptcy filing of crypto lender Genesis has been negative, “the potential overhang on the liquid crypto markets has receded,” the report said. Much of the expected selling pressure has been in illiquid private crypto assets, it said.
The risk of an immediate sell-off in the Grayscale Bitcoin Trust (GBTC) has also receded as creditors and Digital Currency Group, which owns Grayscale, Genesis and CoinDesk, negotiate a settlement, and with all the relevant situations now under court settlement, the “public crypto markets seem to have felt some relief from any forced selling narratives.”
It is unlikely, however that this is the start of a sustained rally, because this is more “capital internal to crypto (sidelined stablecoins) being deployed,” analysts Gautam Chhugani and Manas Agrawal wrote. “We have not yet seen any new capital allocations to sustain this rally.”
Regulatory news from Hong Kong, which is looking to allow crypto trading licenses for some assets, has also contributed to positive sentiment in the crypto market, the note added.
Read more: First Mover Asia: Bitcoin Surges Past $23K Before Retreating
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
Більше для вас
Bitcoin’s Deep Correction Sets Stage for December Rebound, Says K33 Research
K33 Research says market fear is outweighing fundamentals as bitcoin nears key levels. December could offer an entry point for bold investors.
Що варто знати:
- K33 Research says bitcoin’s steep correction shows signs of bottoming, with December potentially marking a turning point.
- The firm has argued that the market is overreacting to long-term risks while ignoring near-term signals of strength, like low leverage and solid support levels.
- With likely policy shifts ahead and cautious positioning in futures, K33 sees more upside potential than risk of another major collapse.
Top Stories
