Bitcoin financial services firm NYDIG published a second-quarter review projecting Bitcoin could decline to $38,000-$39,000 by October if the 2025-2026 downturn follows the depth and duration of previous major market resets. The scenario appeared in the firm's report titled 'Leverage Not Spot Demand Is Driving Bitcoin While Value and Momentum Buyers Wait,' published last week. Bitcoin traded near $64,500 at the time of the report, down almost 30% since the start of the year and roughly 50% below its October 2025 all-time high of $126,080. NYDIG noted the timing and structure of the 2025-2026 drawdown increasingly resemble prior reset years of 2014, 2018 and 2022, bringing the 4-year cycle narrative back into focus. Earlier this month, Bitcoin reached a 21-month low of $58,035, briefly wiping about $40 billion from the wider crypto economy in a single day.
NYDIG Maps $38,000-$39,000 Scenario Based on Historical Drawdown Patterns
NYDIG stated in its second-quarter review that Bitcoin's 2025-2026 drawdown is bringing the 4-year cycle narrative back into focus because the timing and structure increasingly resemble the prior reset years of 2014, 2018 and 2022, even though the path has not matched those drawdowns exactly. The firm applied a 2022-style decline of roughly 70% to the October 2025 peak of $126,080, which lands almost exactly on the $38,000-$39,000 corridor. The timing points to a potential floor by October 2026, four years after the last cycle's bottom.
![NYDIG second quarter returns report.]()
NYDIG stopped well short of calling the figure a forecast, noting that 2025 was Bitcoin's least volatile year on record, which could compress the drawdown and produce a shallower landing than previous cycles. In an earlier note, the firm observed that the market has seen "no long-term-holder capitulation, no terminal insolvencies, and no reset." The firm characterized the market as leverage-driven rather than demand-driven, where value and momentum buyers are waiting on the sidelines.
Bitcoin Bear Markets Historically Produced 75% to 85% Peak-to-Trough Declines
Bitcoin's four-year cycle refers to the market's historical rhythm of a peak, a year-long contraction, and a recovery, loosely anchored to the network's halving schedule. The bear markets of 2014, 2018 and 2022 produced peak-to-trough declines in the range of 75% to 85%. More than half of all BTC sits at an unrealized loss, a condition that has accompanied every prior cycle floor.
Analyst Views Range from $60,000 Bottom to Extended Bear Market into 2027
The $38,000 scenario is the most bearish of the major desk calls. K33 Research has argued the dip near $60,000 already represented this bear market's maximum drawdown, with consolidation between $60,000 and $75,000 ahead. Standard Chartered has similarly suggested the bottom formed around the $59,000 level, while Galaxy Digital has floated a decline toward $40,000. Separately, Cryptoquant CEO Ki Young Ju has warned the bear market could stretch into early 2027, while Grayscale sees two paths out of the downturn hinging on macro catalysts in the coming months. Analysts agree the market is late in the contraction but are split on how much pain remains.
FAQ
What scenario did NYDIG publish in its second-quarter review?
NYDIG published a scenario in which Bitcoin's slide extends to $38,000-$39,000 by October if the 2025-2026 downturn follows the depth and duration of the market's previous major resets. The scenario appeared in the firm's second-quarter review titled 'Leverage Not Spot Demand Is Driving Bitcoin While Value and Momentum Buyers Wait,' published last week.
How does NYDIG's scenario compare to other analyst views?
The $38,000 scenario is the most bearish of the major desk calls. K33 Research has argued the dip near $60,000 already represented this bear market's maximum drawdown. Standard Chartered has similarly suggested the bottom formed around the $59,000 level, while Galaxy Digital has floated a decline toward $40,000. Cryptoquant CEO Ki Young Ju has warned the bear market could stretch into early 2027.
What were Bitcoin's historical bear market declines?
The bear markets of 2014, 2018 and 2022 produced peak-to-trough declines in the range of 75% to 85%. Applying a 2022-style decline of roughly 70% to the October 2025 peak of $126,080 lands almost exactly on NYDIG's $38,000-$39,000 corridor.
