- Grayscale says Bitcoin may have bottomed and could break the traditional halving-cycle pattern with a new all-time high in 2026.
- ETF outflows have eased, with four straight days of inflows signaling a return of buyer interest.
- Federal Reserve rate decisions and upcoming U.S. crypto legislation could boost Bitcoin’s 2026 outlook.
The latest Bitcoin retracement may be stabilizing. Asset manager Grayscale argues the market could be set to break the customary four-year halving cycle and reach a new all-time high in 2026.
Despite uncertainty after a 32% drop from a recent peak, emerging indicators suggest the current pullback is nearer to a local bottom than the start of a prolonged decline.
Market indicators point to a local bottom
In a research report published Monday, Grayscale noted that Bitcoin’s performance in 2025 has diverged from the typical post-halving pattern.
The firm believes the long-held four-year cycle thesis could prove incorrect and that Bitcoin may set fresh record highs next year.
One key signal cited is a rising Bitcoin options skew that has climbed above 4.
That level suggests investors have been hedging extensively against further declines—a dynamic that often signals selling pressure is waning.
Grayscale argues that, while broader prospects remain uncertain, current dynamics support the case for a cycle shift.
Analysts caution, however, that a sustained recovery depends on meaningful reversals in several major flow metrics.
Those include futures open interest, ETF flows, and selling activity from long-term Bitcoin holders—all of which put downward pressure on prices in recent weeks.
ETF outflows relent as buyer appetite slowly returns
U.S. spot Bitcoin ETFs, a primary momentum driver through 2025, exerted substantial downward pressure on the market in November.
According to data from Farside Investors, those products recorded net outflows of $3.48 billion during one of their worst months on record.
But the trend has begun to reverse.
The funds have posted four consecutive days of inflows, including $8.5 million on Monday.
Although still early, the shift indicates investor interest may be gradually recovering after the recent sell-off.
Market positioning reflects what Nexo analyst Iliya Kalchev calls a “leverage reset rather than a sentiment breakdown.”
He added that the short-term trajectory depends on whether Bitcoin can reclaim the low $90,000 range to avoid slipping toward stronger support in the mid-to-low $80,000s.
Fed policy and U.S. crypto legislation emerge as key catalysts
Investors are now focused on the next major macro catalyst: the Federal Reserve’s rate decision on December 10.
The market currently prices an 87% probability of a 25 basis-point rate cut, up sharply from a 63% chance implied a month ago.
Grayscale notes that the Fed’s decision and forward guidance could play an important role in shaping Bitcoin’s path into 2026.
Progress on U.S. digital asset regulation later this year could provide an additional catalyst.
Attention has centered on the Digital Asset Market Structure bill, which Grayscale says could accelerate institutional adoption if it maintains bipartisan support ahead of the midterms.
Momentum began with passage of the CLARITY Act in the House earlier this year, part of a broader Republican “crypto week” initiative.
Senate leaders from both parties have expressed interest in advancing legislation through the Responsible Financial Innovation Act, aimed at creating a clearer regulatory framework for digital assets.
The bill is under review in the Senate Agriculture Committee and the Senate Banking Committee.
Senate Banking Committee Chair Tim Scott has indicated lawmakers aim to finalize and sign the bill into law in early 2026—a timeline that could align with what Grayscale views as a pivotal year for Bitcoin’s next growth phase.