- Grayscale says Bitcoin could be at a local bottom and may break the halving cycle to reach new highs in 2026.
- ETF outflows have eased after four days of inflows, signaling a gradual return of buyer interest.
- Federal Reserve rate decisions and U.S. crypto legislation could shape Bitcoin’s outlook for 2026.
The latest Bitcoin retracement may already be settling, with asset manager Grayscale arguing that the market is well positioned to break its traditional four-year halving cycle and potentially reach new all-time highs in 2026.
Despite uncertainty following a 32% decline from recent peaks, new indicators suggest the current pullback may be closer to a local bottom than the start of a prolonged downtrend.
Market indicators point to a local bottom
In its Monday research note, Grayscale said Bitcoin’s performance in 2025 has already shown characteristics that differ from the typical post-halving pattern.
The firm believes the long-held theory of a strict four-year cycle is likely to be proven incorrect, and that Bitcoin could set new highs next year.
One key signal is a jump in Bitcoin options skew that rose above 4.
That level indicates investors have broadly hedged against further declines, which often suggests selling pressure may be diminishing.
Grayscale adds that while the broader outlook remains uncertain, the current dynamics support a cyclical shift.
Analysts caution, however, that a sustained recovery depends on meaningful reversals across several major flow indicators.
These include futures open interest, ETF flows, and selling activity from long-term Bitcoin holders — all of which have pressured prices in recent weeks.
ETF outflows ease as buying appetite slowly returns
U.S. spot Bitcoin ETFs, which were the primary driver of the asset’s momentum throughout 2025, exerted significant downward pressure on the market in November.
Products recorded net outflows of $3.48 billion during their second worst month on record, according to Farside Investors data.
However, the trend has begun to reverse.
Funds have posted four consecutive days of inflows, including a modest $8.5 million on Monday.
While early, the shift suggests investor interest may be gradually recovering after the recent sell-off.
The market posture reflects what Nexo analyst Iliya Kalchev calls “a leverage reset, not a sentiment break.”
He adds the short-term trajectory hinges on whether Bitcoin can reclaim the low $90,000s to avoid stronger support testing in the mid-to-low $80,000s.
Fed policy and U.S. crypto legislation emerge as key catalysts
Investors are now eyeing another major macro catalyst: the Federal Reserve’s interest-rate decision on December 10.
Markets currently price an 87% probability of a 25 basis-point rate cut, significantly higher than the 63% probability priced in 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.
Later in the year, U.S. digital-asset regulation could provide an additional catalyst.
Attention has focused on a market-structure bill for digital assets that Grayscale says could accelerate institutional adoption if it retains bipartisan support ahead of the midterm elections.
Momentum began with the House’s passage of the CLARITY Act earlier this year, part of a broader Republican “crypto week” initiative.
Senate leaders from both parties have expressed interest in following up with legislation called the Responsible Financial Innovation Act, which aims to create a clearer regulatory framework for digital-asset markets.
The proposal is under review in both the Senate Agriculture Committee and the Senate Banking Committee.
Senate Banking Chairman Tim Scott said lawmakers plan to finalize and sign legislation by early 2026, a timeline that could align with what Grayscale views as a pivotal year for Bitcoin’s next growth phase.