Bitcoin price analysis and 2026 forecast

Bitcoin: Fed Correlation, $75K Support & 2026 Outlook

Fed Policy & Bitcoin: The Hidden Driver

The relationship is structural, not coincidental. 68-82% of Bitcoin's price variance is explained by net liquidity (Fed Balance Sheet minus TGA minus Reverse Repo). This isn't correlation-it's causation.

How Fed Policy Actually Moves BTC

The smoking gun: The 2025 crash from $126K to $91K had no crypto-specific cause. It was $647B in TGA (Treasury General Account) drain over 6 months-pure liquidity removal.

FOMC Pattern in 2025: Consistently Bearish

BTC fell after 7 of 8 Fed decisions in 2025. Today's hold at 3.50-3.75% continues the pattern. J.P. Morgan expects no cuts through all of 2026.

But here's what's underappreciated: QT ended December 1, 2025. That removes $40B/month of liquidity drain. The question is whether this passive tailwind can offset the "higher for longer" active headwind.

What to Watch

TGA levels are your leading indicator. When Treasury draws down the TGA (currently $962B), that's liquidity injection into markets. Check the Fed H.4.1 release every Thursday at 4:30 PM ET.

The $75K-$80K Support Zone: Technical Deep Dive

Correction: $80.7K is THE line-not $75K.

The "True Market Mean" at $80.7K is what analysts describe as the boundary between "routine correction" and "deeper structural weakness." Breaking $80.7K changes the character of the decline.

Why This Zone Matters

The Problem Below $80K: Thin Air

URPD (UTXO Realized Price Distribution) data shows little supply accumulated between $70K-$80K. This means:

• If $80K breaks, expect a rapid move to $74K-$75K
• If $75K breaks, next support is $70K
• Extreme bear case: $60K, with $56K (Realized Price) as the ultimate floor

Current Cost Basis Distribution

63% of invested BTC wealth is underwater. Heavy cost basis concentration above $88K creates persistent selling pressure as holders try to limit losses.

This is why rallies have been rejected-there's a wall of underwater holders looking to sell into strength.

Realistic 2026 Outlook: Updated Assessment

Given the new Fed correlation data and technical analysis, here's my updated view:

Three Scenarios (with probabilities)

Why I Weighted the Base Case at 50%

1. Fed is THE variable. If they cut rates in H2 2026, historical correlation suggests BTC follows liquidity up. If "higher for longer" persists all year, the bear case gains probability.

2. QT ended December 2025. This removes a $40B/month headwind. It's not enough alone, but it shifts the baseline.

3. February seasonality. Historically averages +13% gains. If $80K holds, this pattern could provide near-term relief.

4. Institutional forecasters converge at $140K-$160K. When different methodologies arrive at similar numbers, the assumptions are probably reasonable.

The Key Decision Point

Watch $80.7K, not $75K. If the True Market Mean holds through February, the base case remains intact. If it breaks, probability shifts toward the bear case and downside targets open up ($70K, then $60K).

The Bottom Line

Fed correlation is real and dominant. Don't overthink crypto-specific narratives when 68-82% of price variance is explained by macro liquidity.

The current setup:

• Headwind: Higher for longer rates, no cuts expected in 2026
• Tailwind: QT ended Dec 2025, TGA could drain further
• Critical: $80.7K must hold or character of decline changes

Realistic EOY 2026: $100K-$140K if $80K holds and Fed eventually cuts. $50K-$70K if $80K breaks and "higher for longer" persists. The base case is ~$120K, but it's a wide distribution-not a point estimate.

Anything else affecting current price and whats expected? Are there any unseen factors?

Bitcoin: Hidden Factors Beyond Fed & ETFs

Uros Gazvoda Yes-there are several underappreciated factors that could move BTC beyond what we've covered. Here's what's flying under the radar:

Bullish Signals (Not Getting Attention)

1. Hash Ribbon Deep Capitulation → Buy Signal

Bitcoin miners are capitulating. Hash rate dropped 20% from 1.2 ZH/s to 950 EH/s, and the next difficulty adjustment is -17%-the largest since China's 2021 mining ban.

Why this matters: Hash Ribbon capitulation events have historically marked cycle bottoms:

• FTX collapse (Nov 2022): $15K → $22K rebound
• Yen carry trade unwind (Aug 2024): $49K → $100K rally

When weak miners sell and hash rate normalizes, it typically triggers strong rallies within 4-8 weeks. This is a contrarian buy signal developing now.

2. Dollar Weakness: 15-Year Trendline Broken

DXY fell below 96, breaking a trendline that held since 2011. In 2017 and 2020, DXY below 96 preceded major BTC rallies.

If the monthly close confirms this breakdown, dollar weakness becomes a structural tailwind. The IMF is modeling "unthinkable" dollar scenarios-this isn't just technical noise.

Bearish Signals (Not Getting Attention)

3. Stablecoin Supply Contraction

Total USDT + USDC supply dropped $7B+ to $257.9B. USDC alone is down $6B.

Why this matters: Stablecoins are the "dry powder" for crypto rebounds. When they contract, it means capital is leaving the ecosystem entirely-not sitting on the sidelines waiting to buy the dip. This removes fuel for any rally attempt.

4. CLARITY Act Delayed → Regulatory Tailwind Removed

The Stablecoin CLARITY Act, which was supposed to provide regulatory clarity, hit a wall. The Senate Banking Committee postponed its January 15 vote due to 100+ contested amendments. Coinbase withdrew support over stablecoin interest provisions.

Timeline is now uncertain-may slip past the November 2026 midterms. The expected regulatory catalyst isn't coming soon.

Watch Closely (Could Go Either Way)

5. $8.5B Options Expiry Tomorrow (Jan 30)

Max pain sits at $88K-the level where most options expire worthless.

• If BTC holds above $90K: Bullish skew (put/call ratio 0.56)
• If BTC stays below $90K: Bearish skew (put/call ratio 1.26)

Historical precedent: A $23B expiry in late 2025 caused $130B intra-hour swings. Tomorrow could be volatile-watch the $88K-$90K zone as a decision point.

6. MicroStrategy Systemic Risk

MicroStrategy holds $43B+ in BTC at an average cost basis around $60K. If BTC approaches that level, there's a question of margin/covenant pressure.

This is being flagged as a potential systemic risk-Russia officially listed "crypto crash" as a black swan concern in 2026 planning, citing leveraged institutional positions. Prediction markets are hedging for $52K scenarios.

Summary: Hidden Factor Scorecard

My Updated Read on What's Next

Short-term (next few weeks): Volatility around tomorrow's options expiry. The $88K max pain level and stablecoin contraction suggest continued pressure. Don't expect a V-shaped recovery.

Medium-term (Q1-Q2 2026): The Hash Ribbon capitulation is the most interesting hidden signal. If hashrate normalizes in the next 4-8 weeks while $80K holds, that's historically been a strong buy setup. The DXY breakdown adds a tailwind if it confirms.

Risks to watch: If BTC breaks $80K and heads toward $60K, MicroStrategy's leverage becomes a systemic question. That's when "hidden factors" could cascade.

End 2026: My prior assessment holds-$120K-$160K base case IF $80K support holds and the Fed eventually cuts. But the stablecoin contraction and delayed CLARITY Act reduce the probability of the bull case ($175K+).