Grayscale Says Bitcoin Could Fall Further If CLARITY Stalls As CryptoQuant Sees First Bottoming Signal

Grayscale believes Bitcoin may already be close to its cycle low if several macro and crypto-specific catalysts fall into place, but it also warned that downside risk remains if those conditions fail to materialize.

In its latest market outlook, Grayscale’s bear-market scenarios outline a constructive path where the CLARITY Act clears the U.S. Senate, Strategy continues strengthening its balance sheet, and the Federal Reserve avoids additional rate hikes. Under that combination, Bitcoin may already be near its low for the cycle.

The firm also outlined a less favorable outcome. If the CLARITY Act fails to pass this year, Digital Asset Treasury companies continue deleveraging, and persistent inflation forces the Federal Reserve to raise interest rates again, Grayscale believes Bitcoin could fall moderately further before establishing a durable bottom.

Grayscale added that previous Bitcoin cycles recorded drawdowns approaching 80% from peak to trough, but argued the current cycle is unlikely to match that severity because institutional participation has become larger and more persistent than in prior market downturns.

CryptoQuant Sees The First Bottoming Flag

The macro backdrop arrives as CryptoQuant contributor MorenoDV says Bitcoin is finally showing the first meaningful signs of an internal market reset.

MorenoDV’s Bitcoin bottoming analysis focuses on the UTXO Block Profit/Loss Count Ratio, an onchain measure tracking how much of the network remains in profit versus loss.

The indicator has now entered a range that has historically appeared during bottoming processes, suggesting that unrealized profits across the market have compressed substantially. That typically reflects a healthier reset than markets experience during the early stages of a correction.

MorenoDV nevertheless cautioned that the current signal should not be mistaken for confirmation that the bear market has ended. The analyst wrote that Bitcoin is finally showing evidence of a meaningful internal clean-up, but history suggests the market may still need to absorb additional stress before the bearish phase is fully exhausted.

Short squeezes and temporary rebounds remain possible during that process, particularly if bearish positioning becomes crowded. However, MorenoDV argued those rallies should not automatically be interpreted as the start of a new bull market unless broader profit and loss conditions improve across the network.

Regulation, Liquidity And Macro Stay In Focus

Taken together, the two reports point toward the same conclusion from different directions.

Grayscale focuses on macro policy, regulation and institutional capital. CryptoQuant focuses on blockchain data and investor positioning. Both suggest that Bitcoin is moving closer to a potential bottoming phase, but neither argues that the recovery is already confirmed.

The regulatory backdrop also remains central. Debate around the CLARITY Act continues after recent Senate discussions over crypto market structure kept regulatory certainty in focus across major markets. Institutional demand also remains tied to broader liquidity conditions, including the role of stablecoin liquidity as fresh capital enters or leaves the crypto ecosystem.