Bitcoin The price continues to reflect a complex combination of macro trends and specific market events heading into 2026.
BTC is made up of three long-term and seven short-term forces, 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, the disinflationary growth of bitcoin supply and its adoption. Short-term drivers include market risk sentiment, interest rates, US dollar strength, seasonality, central bank excess liquidity, supply of large bitcoin portfolios, and financial contagions.
Several of those near-term variables appear to be lining up in bitcoin’s favor as 2026 begins. Ferraioli noted that credit spreads remain tight and the market has already eliminated many of the speculative derivatives positions that helped fuel the sharp sell-off in late 2025.
A “risk-on environment in equities should support cryptocurrencies, the ultimate risk asset,” he said.
Monetary policy could also play a favorable role. “We believe rates and the dollar will continue to decline this year,” he added. “Liquidity is supportive as quantitative tightening is over and balance sheet expansion has started again.”
Still, headwinds persist. Adoption could slow in the first half of the year, especially after the volatility of late 2025, although Ferraioli sees potential for a turnaround if regulatory clarity improves. “Passage of the Clarity Act could accelerate adoption among true institutional investors,” he said.
There is also the halving cycle to consider. “The third year of the halving cycle has historically been a bad year. Since there are many cryptocurrency investors who follow that cycle theory, that could weigh on prices,” he argued.
Since 2017, bitcoin has typically gained about 70% from its annual low each year, although that move is meant to smooth out volatility. While 2026 is expected to be a positive year, yields are likely to be well below that historical average, according to Ferraioli.
He also noted a possible shift in the way bitcoin moves relative to traditional assets. He expects cryptocurrencies to be less correlated with other asset classes and macroeconomic factors. “It is still highly correlated with mega-cap AI stocks, but the correlation with broader stock indices has been falling,” Ferraioli. saying.
