Bitcoin Struggles as $38K Scenario Gains Traction
Compared to other “risk-on” assets, Bitcoin hasn’t done very well this year, and if past trends continue, its price might fall to $38,000 by October. As per a recent analysis, the asset’s present drop is due to supply and demand rather than risk perception. In the past, the price of Bitcoin has followed that of technology stocks. However, things are different this year: the cryptocurrency markets have seen a decline, while equities tied to artificial intelligence have seen huge gains. At its most recent price of $64,809, Bitcoin is about 50% lower than its all-time high of $126,080 set in October, and it has fallen nearly 30% year-to-date.
“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 report added. Bitcoin has underperformed US treasuries, silver, and currencies like the Swiss franc so far this year, according to NYDIG, making it the worst-performing asset overall. It went on to say that a “potential cycle low near $38k-$39k” might happen if Bitcoin’s price followed the same pattern as previous drawdowns, such the bear market of 2022. Positive news: 2025 was Bitcoin’s least volatile year ever, and some experts are predicting that this year’s fall will be milder than previous bear markets.
During the second quarter of 2026, when both Bitcoin and gold experienced sell-offs, NYDIG saw that the rolling correlation between the two assets intensified. The dominant digital currency, Bitcoin, has been called “digital gold” by its advocates because to its historical association with the precious metal. Last year, however, the asset’s link with US equities, especially tech stocks, was stronger. The so-called debasement trade started to lose steam in the second quarter of 2026, according to NYDIG, which caused other commodities to undergo sell-offs. The “debasement trade” was a 2025 trading tactic used to hedge against the dollar’s and other fiat currencies’ potential devaluation.
According to a report released last week by Bitwise, Bitcoin saw its worst and longest drop since the last bear market at the end of Q2 2026. However, the report argues that the fundamentals are strong enough to support a quick recovery, especially with authorities passing crypto-friendly laws. NYDIG added that the passing of the market-structure CLARITY Act “is the most important forward catalyst for the digital asset industry.” It noted “For Bitcoin, CLARITY’s direct price impact is less significant than for altcoins and crypto equities, but the investment implication remains material because a clearer U.S. market-structure regime would benefit the entire industry.”
