According to Grayscale data, Bitcoin’s current correction falls well within historical norms. The firm argues that BTC could recover within weeks and potentially retest new highs sooner than many expect.

Bitcoin has dropped 32% since early October. Grayscale’s latest monthly report notes that this decline is almost identical to the average depth of similar pullbacks throughout BTC’s history. Since 2010, the market has seen around fifty drawdowns of at least 10%, with an average size of roughly 30%.

Since the November 2022 bottom, such moves have already occurred nine times. The report highlights: “The current correction fits squarely within the range of typical bullish pullbacks.” Grayscale distinguishes between long-term cyclical drawdowns — usually lasting two to three years — and short-term retracements within bull markets, which tend to last two to three months.

The research team also points to several indicators suggesting potential bottom formation. One of the most notable is the surge in demand for downside protection through put options. Grayscale writes: “The elevated put-skew shows that market participants have already hedged much of their downside risk.”

Meanwhile, inflows into spot Bitcoin ETFs remained muted through late November, and futures open interest continued to decline. On-chain data also shows another spike in Coin Days Destroyed — indicating movement among older, long-dormant coins.

On the macro level, investors are focused on the Federal Reserve meeting on December 10. U.S. media reports name Kevin Hassett as the leading candidate to succeed the current Fed Chair. In a September interview with CNBC, Hassett said the previous rate decision was “a good first step” toward “much lower rates ahead.”

Regulation remains another key theme. In November, the U.S. Senate Agriculture Committee introduced a bipartisan market-structure bill for digital assets. As Grayscale summarizes: “We see no signs of an impending deep or prolonged sell-off and consider new Bitcoin all-time highs next year entirely plausible.”

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