Grayscale's report suggests Bitcoin may have hit its bottom if the Fed pauses rate hikes, despite historical cycles indicating a longer decline.
A recent analysis by Grayscale indicates that Bitcoin might have reached its lowest point, contingent on the U.S. Federal Reserve pausing interest rate hikes while keeping the economy stable.
Grayscale's head of research, Zach Pandl, emphasized that Bitcoin operates as a macro asset influenced by broader economic variables.
He suggested that if the Fed refrains from increasing rates, Bitcoin could have already found its bottom, despite traditional four-year cycles suggesting a prolonged bear market.
Pandl explored two different market evaluation methods. One model, based on historical halving events, suggests Bitcoin might continue to decline and potentially hit its lowest price in September or October 2026.
Historically, Bitcoin has formed a bottom approximately a year after its peak and around 2.5 years post-halving, with average declines nearing 80%.
However, Pandl also noted that Bitcoin has evolved as an asset, now responding more significantly to macroeconomic trends, which could lead to a market recovery sooner than past cycles would predict.
“The key takeaway: while the 'four-year cycle' indicates lower price lows for Bitcoin, the current macroeconomic landscape implies the bottom may have already been reached,” Pandl stated.
The upcoming Fed meeting on July 29 is anticipated to be pivotal, with market expectations showing a 66% probability of rates remaining unchanged, a drop from 88% a week prior.
Additionally, regulatory concerns present a distinct risk. On June 26, Pandl noted that the failure of the CLARITY Act in 2026 could compel firms with Bitcoin holdings, such as Strategy, to further decrease leverage, which might exert additional downward pressure on prices.
Meanwhile, K33 analysts reported that over half of Bitcoin's supply is currently at a loss, a condition that historically has preceded price bottoms within weeks in previous cycles.
In contrast, miner Jiang Zhouer predicts a later bottom, estimating that Bitcoin could reach its lowest point between $42,000 and $44,000 in the fourth quarter of 2026.
In June, Grayscale analysts referred to Bitcoin sales by Strategy as a "stress test" of its financial model.
