Bitcoin (CRYPTO:BTC) has retreated sharply from its early-October peak, unsettling traders and reviving concerns that the market could be heading towards a prolonged downturn into 2026.
The recent decline has coincided with wider macroeconomic uncertainty, prompting some investors to question whether the current bull phase has already lost momentum.
Grayscale Research, however, has challenged this cautious narrative, arguing that Bitcoin still has the potential to set new all-time highs next year.
In a new report, the asset manager suggests that common assumptions around Bitcoin’s market structure may no longer apply in the current environment.
Grayscale casts doubt on the long-standing four-year cycle theory that links Bitcoin price movements directly to halving events.
Historically, those cycles have been characterised by explosive rallies followed by deep corrections, but Grayscale notes that this pattern has not clearly emerged in the current cycle.
Analysts at the firm highlight that Bitcoin has yet to experience the kind of steep, parabolic price surge typically associated with market overheating.
This absence of extreme upside, according to Grayscale, points to a more measured and potentially sustainable market dynamic.
The report also identifies a major shift in the sources of Bitcoin demand compared with previous cycles.
Instead of retail-driven inflows through traditional trading platforms, new capital is increasingly coming from corporate balance sheets and exchange-traded products.
Grayscale argues that this structural change could reduce volatility and support higher prices over a longer timeframe.
Supportive macro factors, including the prospect of interest rate cuts and growing bipartisan support for crypto legislation in the United States, are also cited as tailwinds.
“Although the outlook is uncertain, we believe the four-year cycle thesis will prove to be incorrect, and that Bitcoin’s price will potentially make new highs next year,” Grayscale Research said.
Fundstrat chief executive Tom Lee has echoed this optimism, suggesting Bitcoin could reach a new record as early as January if conditions align.
“A recovery in equities and a more dovish Federal Reserve could restore confidence and lift Bitcoin alongside risk assets,” Tom Lee said.
In the shorter term, analyst Ted Pillow has pointed to changes in Bitcoin’s derivatives market as a source of ongoing volatility.
“Open interest is still resetting after the October sell-off, and until it stabilises, BTC is unlikely to show a clear directional move,” Ted Pillow said.
At the time of reporting, Bitcoin price was $89,353.30.