In Brief
- Grayscale says Bitcoin’s 32% drop aligns with normal bull market corrections.
- Institutional flows and ETPs are reshaping Bitcoin’s current market cycle.
- Fed rate cuts and bipartisan crypto bills may support Bitcoin’s next rally.
Bitcoin has declined by 32% since October, but Grayscale says the move aligns with historical bull market corrections. The firm expects that such drops, while sharp, do not indicate a prolonged downturn or structural weakness in the crypto market.
Grayscale highlighted that Bitcoin has faced over 50 drawdowns of 10% or more since 2010, with 30% as the average drop. During the current cycle, which started in late 2022, the asset has already seen nine such corrections, reinforcing that volatility remains part of its normal pattern.
Source: XThe firm also pointed out that institutional flows dominate this cycle, unlike previous retail-driven booms. Bitcoin’s market structure has shifted, with major inflows now coming through exchange-traded products and digital asset treasuries.
Grayscale believes the four-year halving cycle may no longer control Bitcoin’s price movements. The absence of a parabolic top and a more stable market suggests the old model may be fading.
Macro Factors and Policy Support May Boost Momentum
Grayscale’s report stated that upcoming rate cuts and clearer crypto regulation could support Bitcoin’s recovery. If monetary policy eases and bipartisan efforts in Washington progress, institutional adoption may accelerate.
On-chain indicators also suggest the market could be bottoming, as older coins move and hedging increases. Although ETP flows and futures activity remain weak, a shift in these indicators could signal renewed demand and recovery.
Privacy coins outperformed in November, with Monero and Decred showing strong gains. Grayscale attributed this to rising interest in privacy features across the blockchain ecosystem, driven by new developments on Ethereum.
Meanwhile, the SEC has approved new listing standards, boosting the number of single-token ETPs. With more products and growing utility, the broader market may benefit even if price movements remain uneven.
Grayscale concluded that patience remains key, as long-term data continues to favor those who hold through volatility. The firm expects Bitcoin to break past previous highs in 2026 as fundamentals and investor confidence strengthen.
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Source: https://coincu.com/btc-5/grayscale-predicts-new-bitcoin-highs-by/
