Bitcoin Outlook from Late 2025 to 2026: Short-Term Volatility Forms a Bottom, Long-Term Uptrend Under Easing Narrative

By the end of 2025, the global macro liquidity landscape will undergo several key changes—rising expectations for a yen rate hike, the Fed's rate cuts and QE pause, and the restructuring of forex and gold markets. With multiple variables intertwined, the Bitcoin market is expected to display a “three-stage” trajectory: sharp short-term volatility, mid-term consolidation and recovery, and a long-term upward trend. This article analyzes Bitcoin’s trajectory and key variables from December 2025 through 2026, based on core macro backdrops and market logic.

I. Core Macro Backdrop (December 2025): Liquidity Restructuring Drives Market Expectations

1. Yen Rate Hike: Triggers Phase of Global Liquidity Tightening

The market widely expects the Bank of Japan to raise rates by 25bps on December 19, lifting the policy rate to 0.75%. The 2026 rate hike path is clear, likely reaching 1%. This trend will directly raise yen financing costs, triggering large-scale global carry trade unwinding. Previously, markets widely borrowed low-cost yen to invest in high-yield global assets like Bitcoin. As financing costs rise, funds will be forced to exit risk assets on a large scale, leading to a phase of global liquidity tightening—becoming the core shock for the short-term market.

2. The Fed: Easing Cycle Continues, Liquidity Pressure Eases

The Fed has cut rates twice by 25bps each in September and October, lowering the policy rate range to 3.75%-4.00%. The probability of a December rate cut has risen to 80%, with easing expectations further strengthening. More critically, the Fed will officially halt balance sheet reduction (QT) as of December 1, reversing the prior tightening environment and providing key support for the mid-term recovery of risk assets.

3. Forex and Gold: Linked to Bitcoin Market Sentiment

With the yen hiking and the Fed easing, forex markets are showing “yen appreciation, dollar index under pressure.” Gold is expected to first dip then rise—short-term suppressed by carry trade unwinding, funds flowing back to yen, and rising opportunity costs, but mid-term benefiting from a weaker dollar and global risk aversion. Gold’s trend will be linked to Bitcoin’s roles as a hedge and inflation protector, serving as an important market risk appetite gauge.

II. Three-Stage Bitcoin Trajectory (December 2025—2026)

1. Short Term: December—January 2026, Sharp Volatility with Bottom Formation

The core short-term conflict is the liquidity shock from yen carry trade unwinding. Highly leveraged funds will prioritize selling liquid risk assets like Bitcoin to repay yen, and with global risk appetite cooling, Bitcoin will likely see a sharp 5%-15% drop, with key support between $78,000—$85,000.

Timing-wise, around the Bank of Japan’s December 19 rate decision, volatility will spike; both pre-decision speculation and post-decision unwinding will amplify price swings. If the Fed’s December cut falls short of market expectations, it will further suppress risk appetite and trigger a second Bitcoin dip.

A key uncertainty is the scale and pace of carry trade unwinding—if it triggers a liquidity squeeze, Bitcoin’s decline may exceed expectations.

2. Mid Term: February—June 2026, Consolidation and Recovery, Range Moves Higher

In the mid-term, global liquidity will gradually improve, driving Bitcoin’s stabilization and recovery. On one hand, the Fed’s ongoing rate cuts and end of QT will significantly ease dollar liquidity; on the other, as the US-Japan rate spread narrows, yen carry unwinding pressures will gradually ease, and funds will flow back into risk assets, helping Bitcoin stabilize.

During this period, Bitcoin will enter a consolidation and recovery phase, with the trading range gradually shifting to $90,000—$110,000. The February–March period will see a slow recovery as the market digests short-term liquidity shocks; from April–June, with halving expectations heating up, sentiment rebounds and price volatility increases, but the overall trend remains bullish.

Potential headwinds include accelerated BOJ rate hikes or a surprise rebound in US bond yields, both of which could dampen risk asset allocations and cap Bitcoin’s upside.

3. Long Term: From H2 2026, Uptrend Resumes, Challenging Previous Highs

Long-term, Bitcoin will benefit from the dual logic of “easing liquidity + improving supply-demand,” ushering in a sustained uptrend. First, as the Fed’s rate-cutting cycle deepens and real global rates fall, Bitcoin’s inflation-hedge and safe-haven attributes will become more prominent, making it a key macro risk hedge. Second, after the halving, the rate of new Bitcoin supply will drop sharply, further optimizing supply-demand and providing core price support.

From the second half of 2026, Bitcoin is expected to rally toward the $120,000—$150,000 range, with the potential to challenge all-time highs. Note, however, that long-term uncertainties remain—if the US SEC tightens crypto regulation or a global recession exceeds expectations, the uptrend may be delayed.

III. Core Logic and Key Variables: Grasping Bitcoin’s Main Drivers

1. Core Logic: The Three-Stage Foundation

Bitcoin’s trajectory from late 2025 to 2026 fundamentally follows a logic of “short-term liquidity, mid-term easing pace, long-term supply-demand and rates.” Short-term moves are dominated by yen carry unwinding and liquidity shocks; mid-term recovery depends on Fed easing and capital inflows; long-term, Bitcoin’s halving-driven supply-demand improvement and falling real global rates resonate to support the uptrend.

2. Key Variables: Determining the Trajectory’s Pace and Magnitude

1. Bank of Japan Rate Hike Path: Key to watch is whether December’s hike exceeds expectations, and whether 2026 surpasses the 1% target—directly impacting the scale of carry unwinding and global liquidity tightening.

2. Fed Rate Cut Pace: Focus on whether the Fed reaches the 3.0%—3.25% neutral rate target in 2026 as expected; the degree of easing will directly determine the speed of mid-term capital inflows.

3. Global Liquidity Risk: Be alert to systemic liquidity risks from carry trade unwinding—if these spill over to global financial markets, Bitcoin’s recovery will be disrupted.

4. Regulation and ETF Fund Flows: US crypto regulatory direction and net inflows to Bitcoin ETFs directly affect institutional allocation appetite, serving as major support or resistance for the long-term trend.
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