Grayscale Says Macro Forces Trump Bitcoin Cycle Theory
Bitcoin's bear market has sparked debate about when it will end, with some holding to the traditional four-year cycle theory. However, Grayscale suggests that this view may be outdated and that broader macroeconomic forces are now driving Bitcoin's price.
Grayscale notes that previous bear markets have coincided with slowing economic growth and rising real interest rates. This year's downturn has unfolded alongside shifting expectations for the US Federal Reserve policy and higher real interest rates.
The firm believes that Bitcoin's price could find its bottom when those broader economic conditions begin to improve. In fact, if the Federal Reserve refrains from further rate hikes and economic growth remains resilient, BTC's price may have already reached its low, making a further decline unnecessary.
Grayscale is not alone in arguing for an early bottom thesis. Crypto trader Killa also believes that Bitcoin's market structure suggests the bottom may be near, despite the timing of the cycle being slightly off. Analysts Ali Martinez and Doctor Profit have also made similar arguments, warning investors to consider a more macro-driven view.
Killa notes that BTC has now 'swept the dead cat base low' and completed the same five-wave corrective structure seen throughout previous bear markets. However, earlier bear markets took roughly 365 days to reach their final trough, whereas the current cycle would have bottomed in around 260 days.