If You're Expecting A Bitcoin Bear Market In 2026, You Have It Wrong, Grayscale Says

BTC-USD +0.22%

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Grayscale has shot down Bitcoin (CRYPTO: BTC) price crash predictions, predicting that the next major leg could take prices beyond prior records.

Grayscale Says Current Drawdown Matches Bull-Market Norms

In its November market commentary published on Monday, Grayscale said Bitcoin's 32% drop from its October peak fits the pattern of typical bull-market pullbacks.

It noted that Bitcoin has posted declines of 10% or more about 50 times since 2010, making sharp drawdowns a recurring feature of its cycle.

The firm's latest report said investors often underestimate how common such moves are, even during strong cycles.

The research team said it does not expect Bitcoin to enter a prolonged 2-3-year drawdown similar to past "cyclical" declines.

Instead, the firm highlighted that the current market structure differs from prior cycles due to the influence of exchange-traded products and corporate digital asset treasuries.

Grayscale said this shift reduces the relevance of the traditional four-year price rhythm tied to Bitcoin's supply halving.

The firm also pointed to the absence of a parabolic rally in the latest cycle — a pattern that previously preceded multi-year crashes.

It said this moderation, combined with evolving market participation, supports a more constructive outlook for 2025 and 2026.

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Hedging Activity And On-Chain Signals Indicate Bottoming Effort

Grayscale noted that Bitcoin put-option skew remains elevated across three and six-month tenors, signaling active downside hedging.

The firm said such positioning has historically appeared near market lows.

It also highlighted that major digital asset treasuries are trading at discounts to their net asset values, which may reflect reduced speculative exposure.

However, the short-term picture is still mixed.

Futures open interest has declined, and exchange-traded product flows were negative for most of November.

On-chain data showed another spike in Coin Days Destroyed, indicating movement of older Bitcoin that may have belonged to longtime holders.

Grayscale said a clearer bottom requires improvement in flows, stabilization in open interest, and a slowdown in "OG" selling.

Privacy Assets Outperform As Market Rotates

Privacy-focused cryptocurrencies outperformed the broader market in November, with Zcash (CRYPTO: ZEC), Monero (CRYPTO: XMR), and Decred (CRYPTO: DCR) posting double-digit gains.

The rally reflected increased developer activity around privacy tools being built within the Ethereum ecosystem.

Grayscale said privacy is emerging as a defining theme for the next stage of digital asset utility, citing new frameworks and Layer-2 developments.

The firm said XRP (CRYPTO: XRP) and Dogecoin (CRYPTO: DOGE) exchange-traded products began trading under new SEC listing standards.

It said the change expands institutional access to large-cap tokens and broadens the eligible universe for regulated products.

Macro Setup May Support Crypto Into 2026

The report said the broader backdrop remains favorable, with investors watching the Federal Reserve's Dec. 10 meeting for a possible rate cut.

Lower real interest rates typically weigh on the U.S. Dollar and support alternative assets including Bitcoin.

Grayscale also cited ongoing bipartisan work on crypto market-structure legislation, saying progress could attract further institutional capital.

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The Senate Agriculture Committee released draft text in November, and analysts expect more movement next year if the issue avoids partisan gridlock.

Although valuations have lagged sector growth this year, Grayscale said long-term fundamentals should eventually converge with market pricing.

The firm emphasized that the most significant gains historically accrued to long-term holders.

Bitcoin Tests Key Levels As Traders Watch $93,000 Resistance

BTC Price Prediction as of December 2 (Source: TradingView)

Bitcoin on Tuesday bounced from the $84,000 support zone for the second time, reinforcing this level as the primary downside barrier.

Buyers stepped in aggressively during the recent dip, yet the cryptocurrency still trades below a descending trendline near $92,000 to $93,000 that rejected multiple rallies in November.

A breakout above $93,000 would shift momentum upward, with follow-through levels at $97,300 and $100,000.

The Supertrend indicator sits near $97,335 and the Parabolic SAR around $92,974, underscoring the importance of these areas for trend confirmation.

If Bitcoin loses the $84,000 floor, the next supports appear at $78,000 and $72,000.

Market technicians warn that the gap between these levels could lead to a fast decline if selling intensifies.

Bitcoin remains confined between $84,000 and $93,000, with traders watching for a decisive move to determine the next phase.

Image: Shutterstock

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This article If You're Expecting A Bitcoin Bear Market In 2026, You Have It Wrong, Grayscale Says originally appeared on Benzinga.com