Experts are increasingly warning of a possible crypto bull run in the first quarter (Q1) of 2026, driven by a confluence of macroeconomic factors.
Analysts suggest that Bitcoin could rise to between $300,000 and $600,000 if these catalysts materialize.
Five macro trends driving a potential rebound in Q1 2026
The combination of five key trends is creating what analysts describe as a “perfect storm” for digital assets.
1. Bold balance break removes headwinds
The US Federal Reserve's quantitative tightening (QT), which drained liquidity throughout 2025, recently ended.
Stopping this liquidity drain is historically bullish for risky assets. Data from previous cycles suggests that Bitcoin could rise up to 40% when central banks stop reducing their balance sheets.
Analyst Benjamin Cowen indicated that early 2026 could be the time when markets begin to feel the effects of the Fed ending its QT.
2. Interest rate cuts may return
The US Federal Reserve recently cut its key interest rate, and both the central bank's statements and forecasts from Goldman Sachs indicate that interest rate cuts could resume in 2026, potentially lowering interest rates to 3–3.25%.
Lower interest rates typically increase liquidity and increase the appetite for speculative assets like cryptocurrencies.
3. Better short-term liquidity
Increased purchases of US Treasury bills or other measures at the short end of the yield curve could ease funding pressures and reduce short-term interest rates. The Fed has stated that it will begin technical purchases of Treasury bills to manage market liquidity.
“[The purchases are] made solely to maintain an adequate supply of reserves over time, thereby supporting the effective management of our policy rate… these actions are separate from and have no bearing on the direction of monetary policy,” said Fed Chairman Jerome Powell.
The Fed occasionally intervenes in short-term funding markets when liquidity imbalances arise. These imbalances manifest themselves in the overnight repo market, where banks borrow cash against the collateral of Treasury securities.
Recently, several indicators point to increased pressure in short-term financing, including:
Money market funds that hold high cash holdings,
Issuance of treasury bills is tightening after the Ministry of Finance changed its loan mix, and
Increased seasonal demand for liquidity.
The Fed initiated a controlled purchase program of Treasury bills to prevent short-term interest rates from deviating from the target level of the Federal Funds Rate. These are government securities with the shortest maturities, usually from a few weeks up to one year.
Although this is not classic QE, this measure could still provide a significant liquidity boost to the crypto market.
For Q1 2026, the broader implications for risky assets such as crypto and stocks are generally positive but moderate, resulting from a shift in Fed policy towards maintaining or gradually increasing liquidity.
4. Political incentives favor stability
With US midterm elections scheduled for November 2026, politicians will likely prioritize market stability over unrest.
This environment reduces the risk of sudden regulatory shocks and strengthens investor confidence in risky assets.
“If the US stock market falters before the midterm elections, the incumbent administration will be held accountable – therefore they will do everything they can to keep stocks (and crypto) up,” wrote macro researcher Thorsten Froehlich.
5. The “paradox” of working life
Weaker labor market data, such as low employment or moderate job cuts, often trigger dovish Fed responses.
A softer labor market increases pressure on the Fed to ease monetary policy, indirectly creating more liquidity and better conditions for cryptocurrencies.
Expert assessment suggests increasing bullish sentiment
Industry observers support the macroeconomic view. Alice Liu, head of research at CoinMarketCap, predicts a comeback for the crypto market in February and March 2026, citing a combination of positive macro indicators.
“We are going to see a market comeback in the first quarter of 2026. February and March will be bullish again, based on a combination of macro indicators,” Binance reported, citing Alice Liu, head of research, CoinMarketCap.
Some analysts are even more optimistic. Crypto commentator Vibes predicts that Bitcoin could reach $300,000 to $600,000 in the first quarter of 2026. This reflects extreme bullish sentiment amid increasing liquidity and improving macro conditions.
Right now, market participation remains subdued. Bitcoin open interest has fallen, reflecting cautious traders.
If these macroeconomic tailwinds hold, the consolidation could quickly give way to a significant rally and set the stage for a historic start to 2026 in the crypto markets.
