Bitcoin the price continues to reflect a complex mix of macroeconomic trends and market-specific events heading into 2026.
According to Jim Ferraioli, director of crypto research and strategy at the Schwab Center for Financial Research, BTC is shaped by three forces in the long term and seven in the short term.
Long-term drivers are global M2 money supply, disinflationary growth in Bitcoin supply and adoption. Short-term factors include market risk sentiment, interest rates, US dollar strength, seasonality, central bank excess liquidity, large Bitcoin wallet supply, and financial contagions.
Several of these near-term variables appear to be aligned in Bitcoin’s favor in early 2026. Ferraioli noted that credit spreads remain tight and the market has already eliminated many of the speculative derivatives positions that contributed to the late 2025 sell-off.
A “risk-on equity environment should support crypto – the ultimate risk asset,” he said.
Monetary policy could also play a favorable role. “We believe rates and the dollar will continue to fall this year,” he added. “Liquidity is favorable with the end of quantitative tightening and the resumption of balance sheet expansion.”
However, headwinds remain. Adoption could slow in the first half, particularly after the volatility of late 2025, although Ferraioli sees potential for recovery if regulatory clarity improves. “Passage of the Clarity Act could accelerate its adoption by true institutional investors,” he said.
There is also the halving cycle to consider. “The third year of the halving cycle has always been a bad year. Since many crypto investors follow this cycle theory, this could weigh on prices,” he argued.
Since 2017, bitcoin has generally gained around 70% from its annual low each year, although this measure is intended to dampen volatility. Although 2026 is expected to be a positive year, returns will likely be well below this historical average, according to Ferraioli.
He also signaled a possible change in how Bitcoin moves relative to traditional assets. He expects crypto to be less correlated to other asset classes and macroeconomic factors. “It’s still highly correlated with mega-cap AI stocks, but the correlation with broader stock indexes has decreased,” Ferraioli said. said.
