Bitcoins The price continues to reflect a complex mix of macro trends and market-specific events heading into 2026.
BTC is shaped by three long-term forces and seven short-term ones, according to Jim Ferraioli, director of crypto research and strategy at the Schwab Center for Financial Research.
The long-term factors are the global M2 money supply, bitcoin’s disinflationary supply growth and adoption. Short-term factors include market risk sentiment, interest rates, US dollar strength, seasonality, central bank excess liquidity, the supply of large bitcoin wallets and financial contagions.
Several of these near-term variables appear to be aligned in bitcoin’s favor as 2026 begins. Ferraioli noted that credit spreads remain tight and the market has already flushed out many of the speculative derivatives positions that helped drive the sharp sell-off at the end of 2025.
A “risk-on environment in equities should support crypto — the ultimate risk asset,” he said.
Monetary policy can also play a tailwind. “We think rates and the dollar will continue to fall this year,” he added. “Liquidity is supportive with quantitative tightening completed and balance sheet expansion restarted.”
Still, there are headwinds. Adoption may slow in the first half of the year, especially after the volatility at the end of 2025, although Ferraioli sees potential for a turnaround if regulatory clarity improves. “Trialing the Clarity Act can accelerate adoption in true institutional investors,” he said.
There is also the half-life to consider. “The third year of the halving cycle has historically been a bad year. Since there are many crypto investors who follow that cycle theory, it can weigh on prices,” he argued.
Since 2017, bitcoin has typically gained about 70% from its annual low each year, although this measure is intended to smooth out volatility. While 2026 is expected to be a positive year, returns are likely to fall well below historical averages, according to Ferraioli.
He also flagged a possible shift in how bitcoin moves relative to traditional assets. He expects the crypto to be less correlated to other asset classes and macro factors. “It’s still highly correlated to megacap AI stocks, but the correlation to broader stock indexes has been declining,” Ferraioli. said.
