2025 has been a largely strong year for the cryptocurrency market.
Bitcoin climbed to a new all-time high of $126,000 during the year, alongside the launch of several new altcoin-focused exchange-traded funds and the establishment of a Bitcoin Strategic Reserve in the United States.
The period was also marked by continued accumulation of Bitcoin by corporate treasury holders such as Strategy, as well as a series of broader macroeconomic developments that influenced digital asset markets.
However, the market has been bearish over the past few months, and Bitcoin could end the year trading below the $90k level.
Analysts believe that the four-year cycle in the market is fading, suggesting that the events of the previous bull cycles will not be repeated.
With that in mind, it is ideal to look at 2026 and the macroeconomic events that could shape Bitcoin’s price action.
Federal Reserve policy
The Federal Reserve cut interest rates three times in 2025. However, one of the most important messages by the apex bank is the end of the Quantitative Tightening (QT) policy.
This policy shrinks the Fed’s balance sheet by letting bonds mature without reinvesting, effectively removing money (liquidity) from the financial system to fight inflation after massive pandemic stimulus.
With the Fed ending QT earlier this year, it has stabilised its balance sheet at roughly $6.5 trillion by pausing this runoff to ease market liquidity and address money market strains.
The end of QT also suggests that Quantitative Easing (QE) is on the horizon.
QE is an unconventional monetary policy where the US central bank buys large quantities of Treasury bonds and mortgage-backed securities to inject liquidity, lower long-term interest rates, and stimulate the economy when standard rate cuts aren’t enough.
Analysts are optimistic that the QE will commence soon, injecting fresh liquidity into the financial markets, with risk-based assets like Bitcoin set to benefit from the policy.
Another macroeconomic indicator that could shape Bitcoin’s price action is the Fed’s interest rate decision.
According to the CME FedWatch tool, there is a 75% chance that the Fed will cut interest rates at least twice before the end of 2026.
The number of times the Fed cuts interest rates could play a crucial role in how Bitcoin’s price action plays out next year.
More interest rate cuts mean a potential rally for the leading cryptocurrency.
While commenting on Bitcoin’s 2026 outlook, David Schassler, head of multi-asset solutions at VanEck, said,
“Bitcoin is lagging the Nasdaq 100 Index by roughly 50% year-to-date, and that dislocation is setting it up to be a top performer in 2026. As debasement [currency devaluation] ramps, liquidity returns, and BTC historically responds sharply.”
Global geopolitics
The tensions in the Middle East and the Russia-Ukraine war have affected Bitcoin’s performance in 2025. This could be the case again in 2025.
The uncertainty between Russia and Ukraine, and the trade war between the United States and China, could weigh heavily on Bitcoin over the next few months.
The potential settlements of these uncertainties could boost the global financial markets, especially risk-based assets like Bitcoin.
Bitcoin to return to buy-side demand
A recent K33 Research report shows that for next year, the market could transition away from the heavy distribution phase recorded in 2024 and 2025. This suggests that long-term holders selling their coins could slow down in 2026.
Per the report, Bitcoin’s long-term holdings could close 2026 above the current 12.16 million, indicating renewed optimism regarding BTC’s price.
The report pointed out that the on-chain sell-side pressure is approaching saturation and could likely give way to net buy-side demand in 2026.
The buy-side demand could be supported by increased liquidity thanks to the growing institutional access and clearer regulatory frameworks in the market.
2025 has emerged as a pivotal year for Bitcoin, marked by increased institutional and corporate participation, important regulatory developments, and heightened price volatility.
According to a recent Cooper Research, BTC’s four-year cycle hasn’t died; it has been replaced. Since the launch of spot ETFs, Bitcoin has exhibited repeatable Cost-Basis Return Cycles.
Fadi Aboualfa, Head of Research at Copper, is optimistic about Bitcoin’s price over the next few months.
“Since spot ETFs launched, Bitcoin has moved in repeatable mini-cycles where it pulls back to its cost basis and then rebounds by around 70%. With BTC now trading near its $84,000 cost basis, that pattern points to a move north of $140,000 in the next 180 days. If cost basis rises 10-15% as in prior cycles, the resulting premium seen at past peaks produces a target range of $138,000-$148,000,” Fadi added.
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