Recent trends indicate a potential shift in the Bitcoin market, suggesting that the cryptocurrency may be approaching a bottom. Grayscale’s insights point to a breakout from the traditional four-year halving cycle, with predictions of new highs by 2026.
Market Indicators Signal a Possible Local Bottom
A recent research report from Grayscale has indicated that Bitcoin’s performance in 2025 may be deviating significantly from its typical post-halving trends. The firm argues that the long-held four-year cycle theory may not hold true, and Bitcoin could reach new peaks next year.
One critical signal noted in the report is the high volatility index for Bitcoin options, which has surpassed 4. This level suggests investors are already well-hedged against further declines, often indicating a reduction in selling pressure.
Despite the prevailing uncertainty following a 32% drop from recent highs, emerging indicators imply that the current downturn might be closer to a local bottom rather than the onset of a prolonged recession.
However, analysts caution that a sustainable recovery is contingent upon notable reversals in several major flow indicators, including open interest in futures, ETF inflows, and the selling activity of long-term Bitcoin holders—all of which have exerted downward pressure on prices in recent weeks.
ETF Inflows Slow as Buyer Appetite Gradually Returns
Bitcoin spot ETFs in the U.S. have played a pivotal role in the asset’s momentum throughout 2025 but exerted significant downward pressure on the market in November. These products experienced net outflows of $3.48 billion, marking their second-worst month on record, according to Farside Investors data.
Nevertheless, this trend appears to be reversing. Recent days have reported four consecutive days of inflows, albeit modest, amounting to $8.5 million on Monday.
This shift suggests a possible recovery of investor interest after the recent selling spree. Market positioning reflects what Nexo analyst Iliya Kalchev describes as a “re-leveraging restart rather than a sentiment break.” He emphasizes that short-term momentum will heavily depend on Bitcoin’s ability to reclaim the $90,000 range to avoid further decline towards stronger support levels between the low to mid-$80,000s.
Federal Reserve Policy and U.S. Cryptocurrency Legislation as Key Catalysts
Investors are now focusing on the upcoming macroeconomic catalyst: the Federal Reserve’s interest rate decision scheduled for December 10. Currently, markets assign an 87% probability to a 25 basis point rate cut, a significant increase from the 63% estimate a month ago.
Grayscale notes that the Fed’s decision and its outlook could significantly influence Bitcoin’s trajectory heading into 2026.
Later this year, progress in U.S. digital asset regulation may also act as a crucial catalyst. Attention is shifting towards the proposed legislation for a digital asset market structure, which Grayscale believes could boost institutional adoption if it garners bipartisan support ahead of the midterm elections.
This momentum began with the passage of the CLARITY Act in the House earlier this year, part of a broader Republican initiative dubbed “Crypto Week.” Senate leaders from both parties have expressed interest in enhancing legislation through the Responsible Financial Innovation Act, aimed at establishing a clearer regulatory framework for digital asset markets.
This bill is currently under review by both the Senate Agriculture and Banking Committees. Senate Banking Committee Chairman Tim Scott has stated that legislators aim to finalize and enact the legislation by early 2026, a timeline that could align with what Grayscale sees as a pivotal year for Bitcoin’s next growth phase.
