Bitcoin Price Could Bottom at $38K–$39K, NYDIG Says as Bear Market Follows Historic 4-Year Cycle

Bitcoin could still face another leg lower before establishing a durable market bottom, according to NYDIG, which argues that the current bear market increasingly resembles the prolonged reset phases seen in previous four-year cycles.

In its latest quarterly review, the digital asset investment firm said Bitcoin’s 54.3% decline from its October 2025 all-time high has now extended to 268 days, bringing the market closer to the historical duration and depth of previous cycle bottoms.

If history repeats, BTC could eventually find support in the $38,000-$39,000 range around early October, though NYDIG stressed this represents a scenario rather than its base-case forecast.

The report argues that Bitcoin’s weakness has become increasingly driven by crypto-specific supply pressures rather than broader macro risk sentiment, leaving the market caught between cautious value investors and momentum traders waiting for stronger demand signals.

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Four-Year Cycle Points to Potential $38K Bottom

According to NYDIG, Bitcoin’s current drawdown shares several characteristics with the major bear markets of 2014, 2018, and 2022.

The asset has already fallen 54.3% from its record high of $126,000 reached on October 6, 2025, while the correction has lasted 268 days.

By comparison, the previous two major cycle drawdowns lasted 363 and 376 days and ultimately reached declines of 84.3% and 77.6%, respectively.

Bitcoin 4-year cycle — Bitcoin’s 4-year cycle comes back into view. | Credit: NYDIG

Rather than expecting another collapse of that magnitude, NYDIG believes each cycle has produced progressively shallower corrections.

Applying a roughly 70% peak-to-trough decline to the current cycle would place Bitcoin near $38,000-$39,000 by early October.

The firm emphasized that the projection should not be interpreted as a price target but as a historical framework for assessing downside risk if the current reset continues.

Importantly, several on-chain indicators that have marked previous market bottoms, including MVRV, aSOPR, and long-term holder spending metrics, have yet to reach capitulation levels typically associated with durable cycle lows.

Leverage Is Returning While Spot Demand Remains Weak

NYDIG argues that one of the market’s biggest vulnerabilities is the disconnect between derivatives activity and underlying spot demand.

Open interest in Bitcoin futures has begun rebuilding while perpetual funding rates have returned to positive territory, indicating leveraged traders are once again adding long exposure despite the absence of fresh capital entering the market.

Meanwhile, traditional demand indicators remain weak.

ETF outflows show weak spot demand. | Credit: NYDIG

US spot Bitcoin ETFs recorded $4.9 billion in net outflows during the second quarter, while stablecoin market capitalization contracted by roughly $11 billion from late-May highs, suggesting liquidity continues to leave the crypto ecosystem rather than support new purchases.

NYDIG warns that this combination creates an unstable market structure.

If ETF inflows and stablecoin issuance fail to recover, leveraged long positions could become vulnerable to another wave of liquidations, potentially driving Bitcoin lower before a sustainable recovery begins.

The report also notes that Strategy’s newly authorized Bitcoin monetization framework has altered the supply-demand narrative surrounding digital asset treasury companies.

Treasury firms once provided a consistent source of structural buying, but they now risk becoming a source of selling if balance-sheet needs require additional monetization.

CLARITY Act and Capital Flows Remain Key Recovery Catalysts

Despite the cautious outlook, NYDIG identifies several catalysts that could invalidate the bearish scenario.

The most significant is the pending CLARITY Act, which the firm describes as the digital asset industry’s most important legislative event this year.

Passage could establish a clearer federal framework for cryptocurrencies, improving institutional confidence, even if the legislation has a greater direct impact on altcoins than on Bitcoin itself.

JUST IN: 🇺🇸 Tomorrow, July 17, the US House Financial Services Committee will hold a field hearing on how the CLARITY Act can drive financial innovation. pic.twitter.com/lui4W2TSjq

— Whale Insider (@WhaleInsider) July 16, 2026

Equally important will be the return of capital flows.

The firm argues that any meaningful Bitcoin recovery must be supported by sustained ETF inflows and renewed growth in stablecoin supply. Without those confirmations, rallies are more likely to be driven by leverage or short covering than genuine investment demand.

Until those conditions improve, NYDIG believes Bitcoin remains trapped between two distinct buyer groups.

Value investors still do not see sufficient capitulation to justify aggressive accumulation, while momentum investors continue waiting for stronger flow data and regulatory catalysts before increasing exposure.

For now, the four-year cycle remains incomplete, leaving open the possibility that Bitcoin has further downside ahead before the next long-term bull market can begin.

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Bitcoin Price Could Bottom at $38K-$39K, NYDIG Says as 2025 Bear Market Mirrors Past Cycles

Four-Year Cycle Points to Potential $38K Bottom

Leverage Is Returning While Spot Demand Remains Weak

CLARITY Act and Capital Flows Remain Key Recovery Catalysts

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