How real is the crypto rebound? This analyst answers

Investing.com -- Needham & Company told clients in a note on Monday that the recent recovery in digital assets looks durable, raising its crypto volume estimates across the exchanges and platforms it covers.

"How sustainable is the crypto rebound? We believe it has legs," analyst John Todaro wrote, laying out three pillars behind the call.

The first is rotation. Needham said AI stocks, which had drawn retail capital, have cooled amid regulatory pressures around the midterm elections, while retail trading in commodities such as oil and metals has also eased.

That allows capital and investor attention to shift back into crypto, which the firm said looks comparatively exciting again.

The second is that much of the selling has already happened. Alongside ETF and retail outflows, public companies have cut holdings, with digital asset treasuries and bitcoin miners offloading a record 57,000 bitcoin, worth roughly $4.2 billion, in the first half of 2026.

Since the start of the fourth quarter of 2025, public bitcoin companies have sold about 69,500 bitcoin in total.

The third is sentiment. Needham's proprietary Crypto Euphoria Needham Diagram registered 13, which it classifies as "max disinterest" and the lowest reading since the 2022 bear market, a level the firm said typically signals a bottom.

By contrast, the indicator hit euphoric territory in January 2025 during the meme coin surge, which marked the cycle top.

Needham noted roughly 70,000 bitcoin remain on AI-pivoting miners' balance sheets, down from a record 100,000.

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