CMC News

$BTC Faces Three Key Tests for 2026 Rally Continuation, Says Bitwise

Asset manager #Bitwise has outlined three critical conditions that must hold for cryptocurrency markets to reach new highs in 2026 as $BTC and $ETH post early gains. The analysis comes as Bitcoin and Ethereum have climbed roughly 7% year-to-date through the first six days of January.

Bitwise Chief Investment Officer Matt Hougan identified market stability, U.S. legislative progress, and equity market backdrop as determining factors for sustained momentum. Speculative tokens like $DOGE jumped approximately 29% in the same period, signaling renewed risk appetite across digital asset markets.

The first test may already be resolved, according to Hougan, who pointed to the absence of major shocks similar to the Oct. 10, 2025, #liquidation event that wiped out roughly $19 billion in #crypto futures positions. Investors worried for months that large market makers or hedge funds might be forced to unwind positions, creating persistent selling pressure.

Those fears appear to have eased as any major wind-downs would likely have occurred by year-end. The market's early 2026 strength suggests investors have moved past that concern, Hougan stated.

Washington presents the next critical test as proposed U.S. crypto market structure legislation moves through Congress. A Senate Banking Committee markup targets mid-January, though the date requires confirmation and represents just one part of the legislative process.

Disagreements remain around decentralized finance regulation, #stablecoin rewards, and political conflicts. Hougan argued that passage would mark a critical milestone since today's relatively #pro-crypto regulatory stance could be reversed by a future administration without legislation.