Bitcoin could slide to roughly $38,000 to $39,000 by October if the current drawdown ends up resembling earlier cycle resets, according to a new report from NYDIG cited by Bitcoin Magazine. The firm said Bitcoin’s weakness this year has been driven by supply mechanics rather than a deterioration in risk sentiment.
The report said Bitcoin has lagged other risk-on assets in 2026. In prior periods, the asset often moved in step with tech stocks, but this year has looked different: AI-related equities have rallied while crypto markets have slumped.
Bitcoin was recently priced at $64,809, down nearly 30% year to date and close to 50% below its October all-time high of $126,080. NYDIG wrote that the 2025-2026 drawdown is putting the four-year cycle narrative back into focus because its timing and structure increasingly resemble the reset years of 2014, 2018, and 2022, even if the path has not matched those earlier declines exactly.
Underperformance against Treasuries, silver and the Swiss franc
NYDIG said Bitcoin’s year-to-date return makes it the worst-performing asset in its comparison set, trailing U.S. Treasuries, silver, and currencies such as the Swiss franc. It added that if Bitcoin’s price action were to track other drawdowns, including the 2022 bear market, then a potential cycle low near $38,000 to $39,000 would be possible.
The report also pointed to a more constructive detail. Bitcoin recorded its least volatile year ever in 2025, and some analysts have argued that this year’s drawdown could end up being shallower than in prior bear markets.
Correlation with gold rose in the second quarter
NYDIG said Bitcoin’s rolling correlation with gold increased during the second quarter of 2026, when both assets experienced sell-offs. Bitcoin has shown a relationship with gold before, and supporters of the asset have often described it as digital gold.
At the same time, NYDIG said Bitcoin had been more correlated with U.S. equities last year, especially technology stocks. The firm also said other commodities sold off in the second quarter of 2026, with the so-called debasement trade losing momentum.
According to the report, traders in 2025 had treated the debasement trade as a popular way to hedge against the dollar and other fiat currencies losing value.
Bitwise points to legislation as a recovery support
Bitwise said in a report last week that although Bitcoin closed Q2 2026 in its deepest and longest downturn since the last bear market, the foundations for a quick recovery remain in place, including the passage of crypto-friendly legislation by regulators.
NYDIG added that passage of the market-structure bill known as the CLARITY Act is the most important forward catalyst for the digital asset industry. The firm said the law’s direct price effect on Bitcoin is less significant than it is for altcoins and crypto equities, but the investment implication still matters because a clearer U.S. market-structure regime would benefit the industry as a whole.
The story was first published by Bitcoin Magazine and written by Mathew Di Salvo.