Bitcoin 2026 Cycle Outlook: Bullish Structure or Bear Market Reset?

The end of 2025 was rough. Over $1.2 trillion in crypto market value gone in six weeks. Bitcoin gave up more than 30% and slipped below $82,000;a liquidity vacuum. Leverage wiped out, ETF outflows, passive funds pulling capital at once.

But as of now, things feel different. The panic’s faded. What’s left is tighter, more focused. Price is recovering, but slowly. This time around, the engine underneath looks stronger.

Liquidity: Everything Flows from Here

What hit hardest recently wasn’t retail panic, it was mechanical. Business Insider reported $19 billion in liquidations in one day, the biggest in crypto history. Add a wave of institutional de-risking, and the market had no buffer.

Many major central banks are nearing the end of their tightening cycles. Inflation is easing, growth is slowing, and rate cuts are already underway. Historically, Bitcoin tends to perform better when liquidity improves and interest rates fall, as the opportunity cost of holding non-yielding assets like BTC declines.

Supply: Thinning, Quietly

Post-halving dynamics from 2024 are fully in play. Miners are getting half the rewards they used to, and many are scaling back or consolidating. Meanwhile, according to CryptoQuant, exchange reserves are at their lowest since 2018. Coins just aren’t moving like they used to.

A lot of BTC is now effectively out of circulation and locked in long-term wallets, ETFs, corporate treasuries. We can see it in the on-chain data: the active supply is thin, it isn’t a supply shock yet, but it’s close.

Demand: Still There, But Quitter

ETF flows paused last quarter of 2025, but they didn’t collapse. That’s a big change from earlier cycles. Over $50 billion went into spot Bitcoin ETFs in the past year, and most of that capital hasn’t left. Allocators are treating BTC like an asset, not a trade.

Then there’s MicroStrategy. Still sitting on 430K+ BTC and recently raised $1.4 billion in cash. As JPMorgan pointed out, if they’re not forced to sell - and mNAV holds above 1 -they become a backstop. Add in the pending MSCI ruling in January (which decides whether crypto-heavy firms get to stay in major indices), and you’ve got real market structure in play.

Forecasts

The outlook isn’t unanimous, but most serious forecasts now sit in the $120K to $170K range. The outlook is based on ETF flows, constrained supply, and improved liquidity conditions.

Fundstrat is more aggressive, pushing $400K+. JPMorgan’s volatility-adjusted gold model suggests $170K is in play if Bitcoin continues to attract capital the way commodities do (especially gold). But few are pricing in euphoria. Most are looking at this as a grind upward.

Risks: Still Real In 2026

ETF outflows could return fast if macro flips again. The Bybit hack reminded everyone the security layer still isn’t foolproof, Decrypt reported $1.4B lost to a hot wallet exploit. And if MSCI excludes firms like MicroStrategy, $2.8B in passive outflows could hit the tape fast.

Elliott Wave Case: Bear Phase into Late 2026?

From the 2022 lows at $16.5K to the 2025 peak at ~$126K, it’s already a completed five-wave rally. If that’s correct, the end of year drop below $108K could’ve be the start of a longer correction. 

In Elliott Wave terms, these corrections usually play out in three stages: a first drop [A], a bounce [B], then a deeper pullback [C]. If this pattern continues, Bitcoin could stay under pressure into mid-2026. Key price zones to watch on the way down include $84K, $70K, and $58K - areas where past cycles have found support.

Conclusion: A Tighter Market, But a Split Path

Bitcoin heads into 2026 with real structure: liquidity conditions are improving, supply remains limited, and institutional demand hasn’t disappeared. That sets the stage for continued strength, if those drivers hold.

But with the recent breakdown and a possible completed five-wave move, the case for a longer correction is also on the table. Whether this cycle has one more leg higher or already topped, the next phase will be shaped more by mechanics than momentum.