Bitcoin's flagging price will need a stable crypto market free of major blow-ups to reach levels last seen in October last year if it is to have a chance of establishing a renewed rally.
Those include a steady equity market and the passage of the Clarity Act.
Stable crypto and equities marketsThe first requirement is a stable crypto market without any repeat of an "October 10-style" liquidation event.
The historic event was one of the reasons crypto struggled to rally in Q4 2025, according to Hougan, who notes that “investors worried one of these big players might have to wind down operations.
“These potential sales hung over the market like a heavy fog,” the analyst noted, adding that concerns are now in the rearview mirror, greenlighting the first catalyst.
The second is equity market stability.
“A sharp collapse—say, a 20% pullback in the S&P 500—would take the shine off of all risk assets in the short term, crypto included,” Hougan said.
“The equity market needs to stay stable rather than surging or crashing,” Ryan Yoon, senior analyst at Seoul-based Tiger Research, told Decrypt. “Once a certain threshold of stability is reached, investors will naturally look toward the crypto market for higher returns.”
The final catalyst is legislative. The passage of the crypto market structure bill, known as the Clarity Act, would provide a foundational tailwind.
White House crypto czar David Sacks has previously noted that “we are closer than ever” to passing the bill, and the Senate is targeting a January 15 markup.
“If the bill can make it through markup, it would represent a huge step toward approval,” Hougan said. “Without legislation, the current pro-crypto regulatory tilt... could reverse under a new administration. Passage of the Act would enshrine core principles into law and provide a strong foundation for future growth.”
The short-term trend is “likely to be volatile yet strengthening, driven by specific events,” such as the Trump administration's mid-term elections and fiscal policy, Tim Sun, a senior researcher at HashKey Group, told Decrypt on Wednesday.
The medium-term driver will be institutional, driven mostly by spot ETFs absorbing long-term capital, according to Sun. This period will favor a “the strong get stronger” dynamic, improving market efficiency.
Yoon noted that for a broad-based rally, the emergence of a compelling new use case may be necessary, with “OG projects” gaining “renewed attention” as they pivot toward practical utility.
Sun, on the other hand, noted that maturing regulatory frameworks are key, leading to clear institutional onboarding that will strengthen Bitcoin’s narrative as a hedge against inflation and a strategic allocation asset.
