Grayscale: Non-Zero Addresses Hit 57 Million, Bear Phase May Run to October

Grayscale head of research Zach Pandl has argued that the bear market may be approaching its final stages without a new bull run having begun. His primary on-chain signal: the number of Bitcoin addresses with a non-zero balance surged to approximately 57 million as of July 31, which he cites as a structural indicator of expanding network adoption that persists even during price weakness .

Pandl also points to macroeconomic tailwinds — rising government debt and persistent inflation — that could drive capital toward scarce assets like Bitcoin. He expects institutional involvement to rise significantly as ETFs mature, though he characterizes the current phase as a transition rather than a full recovery .

On timing, Grayscale published a note in late July suggesting the bear phase could persist until September or October 2026 before a clearer turning point emerges . Some analysts have challenged this call, noting that the Puell Multiple and MVRV ratio paint a more complex picture and that macro risks remain elevated .

Bitwise: "Floor Is Rising" as Institutions Absorb Bad News

Bitwise is more explicit in calling for a bottoming process, though CIO Matt Hougan and Senior Strategist Juan Leon both stop short of declaring a new bull market. Their argument centers on three core observations:

Price resilience to negative news. Hougan noted that Bitcoin absorbed a string of major bearish events throughout 2026 — the Coldcard hack, Strategy (formerly MicroStrategy) selling 1,690 BTC, Middle East geopolitical tensions, and record ETF outflows — without breaking below the $60,000 support level . This inability of bad news to trigger a deeper selloff is taken as evidence the market is "bottoming" rather than heading into another leg down .

Institutions are structurally raising the price floor. Bitwise argues that a broader institutional investor base — including financial advisers, family offices, pension plans, and sovereign wealth funds — is structurally lifting the price floor . Hougan told CoinDesk that trillions in institutional capital could flow into Bitcoin over the next decade as allocations move toward 1% of portfolios .

ETF outflows signaled capitulation, not abandonment. Spot Bitcoin ETFs recorded their worst quarter on record in Q2 2026, shedding $4.9 billion . Bitwise characterized this as consistent with capitulation-level selling rather than structural abandonment . By late July, global Bitcoin ETPs had returned to net inflows of +$93.2 million per week, suggesting the worst of ETF outflows may have passed .

Hougan said he expects Bitcoin to finish 2026 "significantly higher" but framed it as a structural turning point, not a technical confirmation of a new bull cycle . He also noted that old sell signals like "sell in May and go away" have not worked this cycle, and negative headlines are having less impact on price .

On-Chain Signals: Capitulation Persists, but Accumulation Is Underway

Broader on-chain data helps contextualize the asset managers' views. Glassnode's Bitcoin Cycle Composite — which condenses 45 on-chain indicators into a single 0-100 score — registered at 19.9 as of early August, firmly within the cold zone reserved for capitulation phases . Forty-one of those 45 indicators now sit in the bottom two quintiles of their historical cycle ranges, a zone that has historically preceded bottom formations .

At the same time, whale accumulation has been notable. One report documented a Whale Accumulation Trend Score of 0.68 (on a 0-1 scale), with approximately 270,000 BTC accumulated by large wallets in a single 30-day period — the largest monthly accumulation since 2013 . Long-term holders (addresses dormant 155+ days) held 78% of circulating supply .

However, participation metrics paint a mixed picture. The number of active Bitcoin addresses compressed to levels last seen during the 2018-19 bear cycle, with readings around 660,000 to 675,000 in early August 2026 . A separate analysis from February found that active addresses had fallen roughly 31% from mid-2025 levels .

Key Points of Agreement and Divergence

The Caveats: This Is Not a Clear Bullish Signal

Neither firm is definitively calling the start of a new bull market. Grayscale's September-to-October timeline comes with the explicit acknowledgment that other on-chain metrics complicate the picture . Bitwise's own data shows three consecutive quarters of negative returns for its 10 Large Cap Crypto Index — the longest losing streak since 2022 . The Glassnode composite score still sits in capitulation territory, and active address participation remains depressed .

What both firms agree on is that the structure of this bear market is fundamentally different from prior cycles. Institutional access via ETFs, the growing involvement of long-term-focused capital pools, and the inability of severe negative news to trigger a deeper selloff have all combined to produce a downturn that is historically shallow and may be nearing its conclusion — even if the exact timing remains uncertain.

Grayscale: Non-Zero Addresses Hit 57 Million, Bear Phase May Run to October

Grayscale head of research Zach Pandl has argued that the bear market may be approaching its final stages without a new bull run having begun. His primary on-chain signal: the number of Bitcoin addresses with a non-zero balance surged to approximately 57 million as of July 31, which he cites as a structural indicator of expanding network adoption that persists even during price weakness .

Pandl also points to macroeconomic tailwinds — rising government debt and persistent inflation — that could drive capital toward scarce assets like Bitcoin. He expects institutional involvement to rise significantly as ETFs mature, though he characterizes the current phase as a transition rather than a full recovery .

On timing, Grayscale published a note in late July suggesting the bear phase could persist until September or October 2026 before a clearer turning point emerges . Some analysts have challenged this call, noting that the Puell Multiple and MVRV ratio paint a more complex picture and that macro risks remain elevated .

Bitwise: "Floor Is Rising" as Institutions Absorb Bad News

Bitwise is more explicit in calling for a bottoming process, though CIO Matt Hougan and Senior Strategist Juan Leon both stop short of declaring a new bull market. Their argument centers on three core observations:

Price resilience to negative news. Hougan noted that Bitcoin absorbed a string of major bearish events throughout 2026 — the Coldcard hack, Strategy (formerly MicroStrategy) selling 1,690 BTC, Middle East geopolitical tensions, and record ETF outflows — without breaking below the $60,000 support level . This inability of bad news to trigger a deeper selloff is taken as evidence the market is "bottoming" rather than heading into another leg down .

Institutions are structurally raising the price floor. Bitwise argues that a broader institutional investor base — including financial advisers, family offices, pension plans, and sovereign wealth funds — is structurally lifting the price floor . Hougan told CoinDesk that trillions in institutional capital could flow into Bitcoin over the next decade as allocations move toward 1% of portfolios .

ETF outflows signaled capitulation, not abandonment. Spot Bitcoin ETFs recorded their worst quarter on record in Q2 2026, shedding $4.9 billion . Bitwise characterized this as consistent with capitulation-level selling rather than structural abandonment . By late July, global Bitcoin ETPs had returned to net inflows of +$93.2 million per week, suggesting the worst of ETF outflows may have passed .

Hougan said he expects Bitcoin to finish 2026 "significantly higher" but framed it as a structural turning point, not a technical confirmation of a new bull cycle . He also noted that old sell signals like "sell in May and go away" have not worked this cycle, and negative headlines are having less impact on price .

On-Chain Signals: Capitulation Persists, but Accumulation Is Underway

Broader on-chain data helps contextualize the asset managers' views. Glassnode's Bitcoin Cycle Composite — which condenses 45 on-chain indicators into a single 0-100 score — registered at 19.9 as of early August, firmly within the cold zone reserved for capitulation phases . Forty-one of those 45 indicators now sit in the bottom two quintiles of their historical cycle ranges, a zone that has historically preceded bottom formations .

At the same time, whale accumulation has been notable. One report documented a Whale Accumulation Trend Score of 0.68 (on a 0-1 scale), with approximately 270,000 BTC accumulated by large wallets in a single 30-day period — the largest monthly accumulation since 2013 . Long-term holders (addresses dormant 155+ days) held 78% of circulating supply .

However, participation metrics paint a mixed picture. The number of active Bitcoin addresses compressed to levels last seen during the 2018-19 bear cycle, with readings around 660,000 to 675,000 in early August 2026 . A separate analysis from February found that active addresses had fallen roughly 31% from mid-2025 levels .

Key Points of Agreement and Divergence

The Caveats: This Is Not a Clear Bullish Signal

Neither firm is definitively calling the start of a new bull market. Grayscale's September-to-October timeline comes with the explicit acknowledgment that other on-chain metrics complicate the picture . Bitwise's own data shows three consecutive quarters of negative returns for its 10 Large Cap Crypto Index — the longest losing streak since 2022 . The Glassnode composite score still sits in capitulation territory, and active address participation remains depressed .

What both firms agree on is that the structure of this bear market is fundamentally different from prior cycles. Institutional access via ETFs, the growing involvement of long-term-focused capital pools, and the inability of severe negative news to trigger a deeper selloff have all combined to produce a downturn that is historically shallow and may be nearing its conclusion — even if the exact timing remains uncertain.