Bitcoin May Have Found Its Floor Ahead of Schedule, Grayscale’s Pandl Says
Bitcoin could already have printed its cycle low, long before the point in the four‑year halving cycle where traders usually expect maximum pain, according to Grayscale’s head of research Zach Pandl. He argues that the world’s largest cryptocurrency is behaving less like a niche, speculative toy and more like a macro asset that responds primarily to interest rates, growth expectations and liquidity.
Traditionally, market participants have watched for a major bottom roughly a year to a year and a half after each halving, which this time would have pointed to a low around September-October. Grayscale’s research suggests this pattern may be breaking down as Bitcoin matures and institutional participation grows.
Pandl contends that the dominant forces behind Bitcoin’s price are now macroeconomic drivers, especially the trajectory of US monetary policy. If the Federal Reserve decides to pause further interest rate hikes and the economy avoids a sharp slowdown, he believes the worst of the current downturn may already be behind Bitcoin.
“In an environment where the Fed steps back from tightening and growth remains resilient, it is reasonable to think that Bitcoin’s price has already bottomed,” Pandl wrote in a recent report. In his view, the asset now tends to find a floor when macro headwinds peak and begin to shift, rather than simply following an internal four‑year pattern.
That perspective lines up with how previous crypto bear markets intersected with the broader economy. Pandl notes that major Bitcoin drawdowns have typically occurred alongside slowing growth and rising real interest rates – a combination that tightens financial conditions and drains speculative excess from risk assets. Once those pressures ease, Bitcoin has historically started to recover.
The market is laser‑focused on the Fed’s next interest rate decision, scheduled for July 29. According to probabilities implied by derivatives pricing, traders currently see about a 66% chance that the central bank will leave rates unchanged at that meeting, down from 88% just a week earlier. The shift reflects renewed uncertainty about inflation and growth, and by extension, about how much more tightening the Fed might feel compelled to deliver.
If the Fed signals that the hiking cycle is finished, that could mark an important inflection point for Bitcoin, since lower or stable rates tend to support risk assets, encourage capital flows into alternative stores of value and reduce pressure on leveraged participants. On the other hand, a surprise hawkish stance could delay or weaken any potential recovery.
Other market data points also support the idea that Bitcoin is near, or has already passed, a cyclical low. Earlier in July, crypto brokerage K33 highlighted that more than half of the total Bitcoin supply was then held at a loss. Historically, when over 50% of coins are underwater, capitulation is often close, and price bottoms have followed within weeks in past cycles.
Long‑term holder behavior adds another piece to the puzzle. In June, Swan Bitcoin CEO Cory Klippsten pointed out that long‑term investors’ Bitcoin holdings had climbed to a record 14.7 million coins. Such accumulation during a bear phase is often interpreted as a sign of conviction: strong hands are absorbing supply from short‑term, price‑sensitive traders who are being forced or scared out of the market.
This combination – a high share of supply at a loss and record long‑term holding – is typically observed near major turning points. It suggests speculative froth has largely been flushed out, leaving a base of investors who are less likely to sell on further volatility and more inclined to hold through the next phase of the cycle.
Still, Pandl warns that macro is not the only variable that matters. Regulatory uncertainty in the United States and elsewhere remains a key overhang. In a late‑June report, he argued that if the proposed CLARITY Act fails to pass this year, corporate treasuries such as Strategy and similar firms could continue to reduce leverage and exposure. That kind of balance‑sheet deleveraging, he said, might push Bitcoin “moderately further” to the downside even if the broader macro picture is improving.
This stands in contrast to more bearish projections from some industry participants. Jiang Zhuoer, founder of Lebit Mining Pool, has suggested that Bitcoin may not find its ultimate low until much later in the cycle. He expects a bottom somewhere between October and December 2026, around six months after Strategy’s Multiple to Net Asset Value (mNAV) hits its own cycle trough. That outlook implies a far more drawn‑out adjustment period for the market.
The divide between these views reflects a deeper debate about what really drives Bitcoin’s cycles today. One camp still sees the four‑year halving schedule as the primary anchor, arguing that reductions in new supply and miner economics largely dictate price behavior. The other camp, which includes Grayscale’s Pandl, believes that macro conditions now sit “in the driver’s seat,” and that halvings are just one input among many.
If Bitcoin has indeed “grown up” into a macro asset, its correlations with stocks, especially technology and growth names, may remain elevated during periods of monetary tightening or easing. That would mean traders can no longer look only at on‑chain signals and internal crypto dynamics; they must also track inflation data, job numbers, bond yields and central bank commentary just as they would for equity or FX markets.
For long‑term investors, an earlier‑than‑usual bottom would carry several implications. It could compress the typical cycle, with less time spent in deep drawdown and potentially a more gradual, grind‑higher recovery instead of the explosive rallies and brutal crashes of prior years. It would also suggest that dollar‑cost averaging and accumulation during macro stress might be even more important than trying to perfectly time the halving‑based playbook.
On the flip side, if the more cautious scenario plays out – with prolonged regulatory headwinds, persistent high real rates, or a sharp economic slowdown – Bitcoin could remain under pressure, revisiting or even undercutting recent lows. In that case, the record long‑term holdings might be tested as investors evaluate how much volatility they are truly willing to tolerate.
Market structure also matters in interpreting Pandl’s thesis. The rise of spot Bitcoin exchange‑traded funds, the increasing role of professional trading firms, and expanding access through traditional banks and brokers all contribute to a landscape where Bitcoin is integrated into broader portfolios. That integration tends to make it more sensitive to cross‑asset flows: when portfolio managers de‑risk, they may sell Bitcoin along with equities and high‑yield credit, rather than treating it as a separate, idiosyncratic bet.
At the same time, a maturing derivatives market allows investors to hedge, short or express macro views via Bitcoin futures and options. This can amplify moves around key events like Fed meetings, inflation releases or regulatory announcements. Volatility spikes around such catalysts are increasingly shaped by positioning and leverage in these instruments, not just by spot buying and selling.
Whether or not the exact bottom is already in place, most analysts agree that Bitcoin is deep into the later stages of its current bear phase. Valuations, long‑term holding patterns and the degree of realized losses all resemble previous late‑cycle conditions. What remains uncertain is the trigger that will mark a clear transition back into a sustained uptrend – and whether that trigger will be primarily macro, regulatory, or something entirely unexpected.
For now, Pandl’s view offers a cautiously optimistic narrative: if the Fed backs away from further tightening and growth avoids a severe downturn, Bitcoin may have quietly set its low earlier than history would suggest. But the market will ultimately decide which storyline prevails – the “macro has turned” early‑bottom scenario, or the “long, grinding cycle” that some of the more pessimistic voices still anticipate.