Bitcoin 2026: The Multi-Game of Bear Market Pressure and Bull Market Expectations

By spring 2026, the Bitcoin market has emerged from the deep correction at the end of 2025. From the all-time high of $126,080 in October last year to the current $66,800, a decline of nearly 47%, the market faces a seemingly simple yet highly complex question: is this a short-term bear market rebound or a prelude to a new bull run? Current prices are more than halved from the peak, but compared to the 2022 bear bottom, they still remain at a relatively high level. This ambiguous situation reflects the true state of the market today—clouded by bear market gloom yet showing signs of a bull market.

Three Key Signs of Market Reversal

Since entering 2026, the market has shown clear structural changes. According to a report by Glassnode released earlier this year, profit-taking pressure has significantly eased. During last year’s Q4 peak, daily realized profits exceeded $1 billion, but by year’s end, this had sharply fallen to $183.8 million—a drop of over 80%. This indicates a clear reduction in active selling willingness.

The options market tells a similar story. Since the start of the year, traders have shifted focus from systematic selling to active accumulation. The proportion of call options purchased has risen to 30.8%, signaling some participants are switching from defensive hedging to bullish positioning. Meanwhile, the funding rate for perpetual contracts has fallen to its lowest level since December 2023, indicating a cooling of derivatives market speculation and indirectly confirming a calmer sentiment.

Institutional capital also shows a key turning point. In November 2025, the US spot Bitcoin ETF experienced net outflows of $3.4 billion, raising concerns about waning institutional interest. However, this trend has recently reversed. In the past few weeks, ETF fund flows have turned positive, with institutional investors gradually shifting from net sellers to marginal buyers. These three signs—reduced profit-taking, changing options structure, and ETF inflows—collectively point to a developing market bottom.

Five Major Battlegrounds of Bull-Bear Divergence

However, these stabilizing signs are not the whole story. In fact, Bitcoin is currently playing out a multi-front battle across five critical areas, each capable of tipping the trend.

Technical support levels are the first battleground. The 365-day moving average is now a focal point for bulls and bears. This long-term average represents the market’s average cost basis and is a key technical boundary distinguishing a rebound from a trend reversal. Bitcoin’s price is hovering near this critical level. Historically, whether it can hold above this line directly influences whether a rebound turns into a sustained trend.

On-chain supply and demand conflicts are even more complex. While profit-taking pressure has eased, seller pressure on the chain remains heavy. Short-term holder cost basis models show current prices have rebounded to around $99,100—near their historical average. This means many trapped investors are facing loss realization pressures in this zone, which could limit further upward movement.

Institutional participation is undergoing new shifts. Morgan Stanley plans to allow financial advisors to offer 0-4% Bitcoin ETFs early in 2026, and retail broker E*Trade’s crypto trading service is expected to launch in the first half of the year. These institutional entry signals provide bullish arguments for the market.

The failure of the halving cycle theory has become a consensus. The traditional four-year halving model faces unprecedented challenges. Analyst Ryan Yoon of Tiger Research notes that Bitcoin’s price drivers are shifting from internal supply data to a complex interplay of macro policies, liquidity expectations, and policy uncertainties.

Policy framework reshaping is the biggest variable. The US “Clarity Act” is progressing, and broader crypto regulation frameworks are in development. These policies will provide unprecedented clarity and directly influence the timing of large-scale institutional entry.

Warning Signs from the Bearish Camp

CryptoQuant’s research offers systematic support for the bears. Its “Bull Market Score Index” turned negative as early as November last year, tracking metrics such as network activity, investor profitability, and asset demand. Based on realized prices and historical cycle patterns, CryptoQuant predicts the bear market bottom could be in the $56,000–$60,000 range.

While this decline is significant (requiring a further 15-20% drop from current levels), it is narrower than the 70-80% declines typical of past bear markets, suggesting increased market maturity. On-chain data platform ChainCatcher’s year-end summary of five key indicators all flashed warning signals. Demand growth is now mainly driven by leverage rather than genuine spot buying. ETF inflows have slowed, and mid-sized investors holding 100–1,000 BTC are accelerating their sell-offs.

More concerning is the supply-side pressure. Large positions are concentrated between $91,000 and $117,400, forming a heavy resistance zone. If Bitcoin’s price remains constrained below short-term holder cost basis, confidence-driven new demand could continue to shrink, increasing the risk of further bear market extension.

Bullish Camp’s Supporting Logic

Contrasting with the cautious bears, K33 Research’s annual review is explicitly bullish for 2026, predicting Bitcoin will outperform stocks and gold. This optimism is based on multiple structural supports.

Macro policy expectations provide the first layer. The market broadly anticipates US policy shifting from traditional monetary tightening to a combination of fiscal expansion and regulatory tools, creating a relatively loose liquidity environment. A potential shift in Federal Reserve stance could elevate risk asset valuations, including Bitcoin.

Regulatory clarity is the second pillar. Progress on the “Clarity Act” is expected to see major breakthroughs in the first half of 2026, with broader crypto legal frameworks taking shape. Increased regulatory certainty will remove last legal hurdles for large institutional allocations.

Institutional explosion is widely regarded as the core driver for 2026. US 401(k) plans may soon be allowed to allocate 1-5% of assets to crypto, generating significant long-term demand driven by savings psychology. Glassnode’s analysis suggests that the net inflow into corporate treasuries could reach 150,000 BTC, shifting from opportunistic to structural demand.

Three Major Turning Points in 2026

Looking ahead, the market may not repeat past clear bull-bear cycles but instead experience intense volatility within key ranges, with bulls and bears repeatedly tugging at each other. For investors, identifying genuine turning signals is more critical than blindly betting on one side.

First signal: technical breakthroughs or breakdowns. Whether Bitcoin can sustain above the 365-day moving average and the $99,100 short-term holder cost basis will determine if rebounds are sustainable. Breaking these levels could shift market psychology.

Second signal: capital flow stability. Whether ETF net inflows can establish a steady, sustainable trend rather than a fleeting bounce will influence institutional participation. Maintaining a high proportion of call options (above 30%) also signals market sentiment shifts.

Third signal: policy clarity. As analyst Peter Chung pointed out, the key to long-term growth is the final passage of the Clarity Act. Once substantial progress is made, market certainty will rise sharply, potentially marking the transition from bear to bull.

Navigating Uncertainty Toward Clarity

Market structure has undergone profound change. Exchange-held Bitcoin reserves are at multi-year lows, with more coins locked in ETFs and long-term wallets. This naturally limits selling pressure, and any incremental demand could push prices higher. Derivatives market cool-down suggests a calm that may be setting the stage for genuine buying opportunities.

In 2026, Bitcoin stands at a critical crossroads—facing continued bear pressure but also potential bull triggers. The market may not provide a clear answer until policies are finalized, institutional involvement becomes more concrete, and key technical levels are decisively broken. Investors should exercise patience and precision, closely monitoring each critical moving average for breakthroughs or failures, as these signals could trigger the next major trend.