Bitcoin’s Potential 2026 Rebound Debated Amid Bottoming Signals

• Bitcoin underperformed major assets in 2025 with a 6.2% loss versus gold at 62% and S&P 500 at 16%.

• Bearish sentiment grows ahead of year-end rebalancing, with hedging targeting $75K-$80K levels.

• On-chain data shows short-term holder recovery toward break-even, a past bottom indicator, per Checkonchain analysis.

Bitcoin’s 2026 outlook mixes caution after 2025’s 6.2% loss with bullish signals from on-chain recovery and policy shifts. Explore expert views and demand trends now for smarter crypto decisions.

Is Bitcoin’s bottom really in?

Bitcoin’s bottom appears underway from an on-chain perspective, as short-term holder supply ratios ease toward break-even levels that have signaled past market bottoms. Analyst Frank Fetter highlighted this recovery pattern, noting it reduces panic selling pressure. However, sustained institutional demand remains critical for confirmation.

Bitcoin officially closed 2025 with an annual loss of 6.2%, significantly underperforming traditional assets like gold, which gained 62%, and the S&P 500, up 16%. This lackluster performance has fueled caution among investors ahead of new year rebalancing by major players. Hedging activity has surged, with downside protection strategies focusing on a $75K-$80K range for January 2026.

Despite the bearish tone, Tether strategic advisor and former White House digital assets executive Bo Hines issued a stark warning to skeptics.

“Anyone bearish on Bitcoin heading into 2026 is foolish.”

Hines points to potential bullish catalysts, including the likely passage of a comprehensive crypto market structure bill and the appointment of a new Federal Reserve chair, both expected to foster a more favorable environment for digital assets.

What is driving Bitcoin demand weakness?

Short-term price action hints at a bottoming phase, but mid-term outlooks stay mixed. Institutional inflows into U.S. spot Bitcoin ETFs showed volatility, with $355 million in net inflows on December 30, 2025—the first positive day after seven outflows—only to reverse with $348 million out on New Year’s Eve. Julio Moreno, head of research at CryptoQuant, warns that collective BTC demand, including from treasury firms, has dropped sharply and risks turning negative if trends persist, potentially dragging prices lower.

From an on-chain viewpoint, analyst Frank Fetter observes the BTC bottoming process gaining traction, citing the easing short-term holder (STH) supply ratio and its approach to break-even points that have marked historical lows.

Source: Checkonchain

A key milestone would be decisively reclaiming the STH realized price of around $87.5K, which would discourage loss-taking sales from holders of less than five months. Without steady inflows, however, the current $85K-$90K range faces uncertainty in the short term.

Looking further ahead, projections diverge. Bulls at Grayscale and Bitwise forecast new all-time highs in 2026, driven by institutional adoption and policy tailwinds. In contrast, Galaxy Research and others adopt caution, describing 2026 as potentially too chaotic for precise predictions amid macroeconomic variables.

Source: CryptoQuant

Frequently Asked Questions

What caused Bitcoin’s 2025 annual loss compared to gold and S&P 500?

Bitcoin’s 6.2% loss in 2025 stemmed from heightened caution, year-end rebalancing outflows, and inconsistent ETF inflows, contrasting gold’s 62% surge and S&P 500’s 16% gain amid broader market resilience and macroeconomic pressures.

Should investors be bearish on Bitcoin entering 2026?

No, according to Tether advisor Bo Hines, who deems bearish bets foolish given catalysts like the crypto market structure bill and new Fed chair. On-chain signals also support a potential bottom, though demand recovery is needed.

Key Takeaways

• Bullish stance for 2026: Bo Hines warns against shorting BTC, highlighting policy shifts as key drivers.
• On-chain bottom signals: Short-term holder metrics recover to break-even, per Checkonchain.
• Demand risks persist: Monitor ETF flows and treasury buying to avoid negative flips, as noted by CryptoQuant.

Conclusion

Bitcoin’s 2026 outlook balances 2025’s 6.2% Bitcoin bottom signals with demand challenges and institutional volatility. Authoritative voices like Frank Fetter and Julio Moreno underscore on-chain progress and risks, while catalysts such as the crypto market structure bill offer optimism. Investors should track STH realized prices and ETF trends closely for informed positioning ahead.