NYDIG (New York Digital Investment Group) released its latest report, showing that Bitcoin is down nearly 30% year-to-date, trading at the bottom across asset classes and underperforming US Treasuries, silver, and more. The current slump is driven by supply mechanisms rather than risk sentiment; the drawdown structure from 2025 to 2026 is increasingly close to 2022. If Bitcoin’s price action fully replicates the 2022 pattern, the potential cycle low could be around $38,000 to $39,000.
NYDIG’s supply-mechanism thesis: structural comparison with reset years in 2014, 2018, and 2022
According to NYDIG’s core analysis in the report, the fundamental driver behind this Bitcoin drop is the supply mechanism—not a deterioration in overall market risk sentiment—which explains why Bitcoin has fallen sharply even as AI-related tech stocks rally. The report says, “Bitcoin’s decline from 2025 to 2026 will bring the four-year cycle narrative back into focus, because its timing and structure are increasingly similar to the prior reset years of 2014, 2018, and 2022, even though its path does not perfectly match the declines seen in those periods.”
If price action fully replicates the 2022 bear market, the estimated potential low is around $38,000 to $39,000.
Rising gold correlation, Bitwise’s outlook, and the significance of the CLARITY bill as a catalyst
Per the report, NYDIG added that Bitcoin’s rolling correlation with gold has risen in 2026 Q2, with both assets being sold off. Other commodities also saw sell-offs in Q2, and the momentum behind the “devaluation trade” that was popular in 2025—strategies that hedge the US dollar and hedge against fiat currency devaluation—has clearly weakened.
Bitwise’s report last week also said that although Bitcoin experienced the most severe and longest sustained drawdown since the last bear market in 2026 Q2, the fundamentals already have the conditions for a rapid recovery.
NYDIG describes the “CLARITY bill” as “the most important forward-looking catalyst for the digital asset industry,” but notes that its direct price impact on Bitcoin is less pronounced than on altcoins and crypto-related stocks. Its long-term significance lies in a clearer US market-structure framework that would benefit the entire industry.
FAQ
Why does NYDIG think Bitcoin’s decline is driven by supply mechanisms rather than risk sentiment?
According to NYDIG’s report, in the current environment AI-related tech stocks are rallying sharply, but Bitcoin is still falling sharply, indicating it is not caused by a contraction in overall market risk sentiment. NYDIG attributes this to Bitcoin’s own supply-cycle mechanism and argues that it has structural similarities to supply-driven reset years such as 2014, 2018, and 2022. The above is NYDIG’s analysis view and does not constitute investment advice.
If Bitcoin replicates the 2022 pattern, where would the low be?
Based on NYDIG’s model estimates, if Bitcoin’s price action fully replicates the 2022 bear-market path, the potential cycle low could be near $38,000 to $39,000. However, the report also points out that in 2025 Bitcoin is the lowest-volatility year in history, and some analysts believe this year’s drawdown may be shallower than past bear markets. All of the above are model estimates and do not constitute investment advice.
How does the CLARITY bill affect Bitcoin?
According to NYDIG’s report, the “Clarity for the Market Structure of Digital Assets Act (CLARITY)” is referred to as “the most important forward-looking catalyst for the digital asset industry.” But its direct price impact on Bitcoin is less obvious than its impact on altcoins and crypto-related stocks. More importantly, it establishes a clearer US digital asset market-structure framework, which would support the long-term development of the entire industry. The specific legislative progress shall be subject to official announcements from the US Senate.
