The possibility has been raised that Bitcoin may have already passed its bottom. Still, analysis says a halving-centred four-year cycle view leaves room for a new low in September to October.

On July 23, blockchain media outlet Coinpost reported that Zach Pandl (잭 판들), head of research at asset manager Grayscale Investments, presented two criteria for viewing the Bitcoin bear market.

Pandl said this Bitcoin downturn should be viewed through two lenses: a halving-centred four-year cycle and macroeconomic trends such as interest rates. If the monetary policy environment does not worsen further, Bitcoin may have already passed its bottom, he said. Under the existing four-year cycle theory, further downside is also possible, he added.

The four-year cycle theory treats Bitcoin halvings as a key price driver. The report said past markets tended to form a bottom about 1 year after the cycle peak and about 2.5 years after a halving, with an average decline of about 80 percent. Applying that yardstick suggests Bitcoin could set a new low around September to October, about 2.5 years after the most recent halving in April 2024, it said.

The macroeconomic view offers a different reading. Pandl viewed Bitcoin as a mature asset that is influenced by macroeconomic changes, like other major asset classes. That means past downturns also tended to overlap with periods of slowing economic growth and rising real interest rates.

That makes the key variable ahead the policy path of the U.S. Federal Reserve (FRB). If the FRB does not raise rates further and economic growth holds, Bitcoin may have already passed its bottom, he said. Pandl said it remains uncertain which of the two scenarios is correct, and he viewed the future direction of monetary policy as the key variable that will determine Bitcoin’s path.

Market fund flows are also in focus. Spot Bitcoin exchange-traded funds (ETFs) recorded net inflows for six straight sessions, the longest streak since May. As inflows into spot ETFs continue, some are raising the possibility of further declines under the halving-cycle theory, while others are also pointing to the possibility that a bottom has passed on stabilising macro conditions.

Grayscale ultimately did not assert which scenario is correct. The report said both interpretations still carry uncertainty, and it cited the direction of monetary policy as the key variable that will determine Bitcoin’s direction. In this situation, the market is expected to watch price moves around September to October, along with the FRB’s rate stance, movements in real interest rates and whether inflows into spot ETFs continue.