Grayscale says bitcoin may be at a turning point after a sharp weekly rally. The crypto asset manager posted a chart on X on Aug. 22 comparing the current downturn with earlier cycles. Bitcoin rose roughly $10,000 in a week to $79,500 on Aug. 21, its highest level since May. That move broke a long trading range and forced some bearish traders to close positions.
Grayscale: Current Drawdown Is Shallower
Grayscale’s chart indexes bitcoin at 100 at each cycle peak and tracks prices by days after that peak. The latest cycle starts with the October 2025 high and runs through Aug. 20. Prior peaks include June 2011, December 2013, December 2017, and November 2021. Bitcoin’s current drawdown is about 50% from its peak. That compares with historical bottoms around 80% below the cycle high. Grayscale noted that this bear market has been less severe than earlier ones at the same stage.
The comparison does not confirm that the low is in. Still, it suggests the market absorbed this downturn without repeating past losses. Bitcoin cycles have often followed a loose four-year pattern tied to halvings, liquidity, and investor behavior. Prior corrections erased roughly 78% to 94% from peaks, but market structure may now reduce how deep declines go.
Vaneck Points to Late-Stage Correction
Separate work from Vaneck points in a similar direction. Its Aug. 18 analysis found eight of 12 capitulation signals active as of Aug. 12. All 12 had entered a capitulation zone at some point in the past three months. Vaneck described the drawdown as potentially late-stage and said bitcoin may be entering an accumulation phase. It expects a shallower trough than in earlier cycles, partly because of spot ETFs, a larger institutional base, and no major leveraged lender failures.
But these signals are not a reliable short-term bottom call. Vaneck found comparable signal clusters produced below-baseline average returns over 90 and 180 days. One-year returns were better, though the sample was small and heavily overlapping.
ETF Inflows Add Support
Renewed demand from U.S. spot bitcoin ETFs helped back the rally. The funds took in about $1.92 billion in net inflows over five sessions, ending Aug. 21. That followed five positive trading days and brought total net assets to $96.07 billion. This suggests the move went beyond short covering. Still, it does not rule out another decline. Higher rates, weaker liquidity, fund redemptions, or profit taking could still test the market.
Grayscale’s conclusion is cautious. Markets were debating another leg down in Q4 2026, but the weekly rally may indicate a more durable bottom has formed. No one knows for sure, but the mix of signals is worth watching.
