According to reports from Crypto.news, Grayscale's Zach Pandl has argued that Bitcoin may have reached its bottom if the Federal Reserve stops raising interest rates and economic growth remains stable. Bitcoin has fallen more than 50% from its $125,000 cycle peak, but Pandl's analysis suggests the cryptocurrency may have already found its lowest point under current macroeconomic conditions. Recent technical analysis supports this view, with InstaForex noting that Bitcoin's current price represents a very good entry point for long positions, though only under certain circumstances. The analysis suggests that Bitcoin's future dynamics will depend on the Fed's monetary policy, the passage of the Clarity Act bill, and further actions by Strategy regarding Bitcoin.
As reported by Crypto.news, Grayscale Research has presented two competing views of when the current Bitcoin bear market could end. Pandl favors the macroeconomic explanation because Bitcoin has increasingly behaved like a mature asset affected by the same macroeconomic forces that influence other major markets. The cycle-based model offers a less favorable timeline, with Bitcoin historically reaching a bottom about one year after its cycle peak and roughly two and a half years after each halving. Previous bear markets have produced average drawdowns of around 80%, suggesting Bitcoin could face more selling before forming a low in September or October. Technical analysis from InstaForex confirms this bearish structure, with Bitcoin continuing to form a downward trend and the CHOCH line now at $82,800 as a new lower low has been formed.
According to Crypto.news, previous Bitcoin bear markets often coincided with slowing economic growth or rising real interest rates. The current decline has unfolded as investors priced in the possibility of more Fed tightening and real borrowing costs moved higher. If policymakers finish raising rates while economic activity remains stable, Pandl believes Bitcoin may not need another major decline to complete its bear market. However, a renewed increase in borrowing costs would weaken this case, particularly if persistent inflation forces the Fed to keep policy restrictive. Recent developments show that the Fed's path remains uncertain with CME FedWatch assigning only a ~50% chance of a September hike, while oil prices have climbed to $94 amid Middle East tensions. This creates an interesting divergence where while Europe appears to be preparing for monetary tightening, the United States may gain greater policy flexibility thanks to moderating inflation.
As reported by Crypto.news, since Grayscale published its June assessment, Strategy has taken steps that the asset manager views as supportive for the company's finances and Bitcoin's price structure. Strategy sold 3,588 Bitcoin for about $216 million on July 6, using the proceeds to meet preferred-share dividend obligations and replenish its dollar reserve. According to Grayscale, the transaction lifted Strategy's reserve to about $2.55 billion, providing enough cash to cover nearly 17 months of dividend payments under existing obligations. The improved cash position helped Bitcoin recover above $63,000 after initially pushing toward $61,000. However, InstaForex notes that Strategy's actions serve as indicators of confidence for many investors, but if even Michael Saylor's company has started selling Bitcoin, then the situation is dire. Among the three conditions outlined by Pandl for Bitcoin's growth, none appear to materialize in the near future.
According to Crypto.news, Grayscale made a similar argument in a June market note that identified Fed policy as one of three conditions affecting Bitcoin's chances of securing a cycle low. The other two involved progress on the CLARITY Act and an improvement in Strategy's financial position. The company's base case assumed that the digital asset market structure bill would pass the Senate, Strategy would strengthen its balance sheet, and the Fed would avoid additional rate hikes. Pandl warned that failure across these areas could extend pressure on Bitcoin, with the possibility of moderate further decline if downside risks materialize. InstaForex agrees that the fundamental background remains negative, with the Federal Reserve not intending to lower key rates in 2026, capital continuing to flow into the AI sector, and spot demand for Bitcoin remaining weak. The analysis suggests that there are no signs of an end to the bearish trend with no bullish patterns or breaks in the bearish structure.
