Experts increasingly predict a potential start of a massive rally in the cryptocurrency market in the first quarter of 2026. This is due to the convergence of several key macroeconomic factors.
Analysts suggest that if these catalysts are implemented, the price of Bitcoin could rise to $300,000–$600,000.
Macroeconomic trends: catalysts for the Q1 2026 rally
The combination of five macroeconomic factors creates what analysts call the "perfect storm" for the digital asset sector.
1. Suspension of the Fed's balance sheet reduction (QT)
The quantitative tightening (QT) program, under which the Federal Reserve (Fed) of the USA actively withdrew liquidity from the market throughout 2025, has recently concluded. Historically, the cessation of the central bank's balance sheet reduction is a strong bullish signal for risk assets. Data from previous cycles indicate a potential bitcoin rise of up to 40% after the balance sheet reduction stops.
A simple cessation of liquidity outflow has historically been a favorable factor for risk assets. Data from previous cycles show that bitcoin can rise by 40% when central banks stop reducing their balances.
Analyst Benjamin Cowen noted that markets will begin to feel the full impact of the Fed's QT conclusion precisely at the beginning of 2026.
The Fed recently announced its first interest rate cut. The regulator's comments and Goldman Sachs forecasts indicate a likely resumption of the easing cycle in 2026, which could lower the rate to 3–3.25%. Lower rates traditionally contribute to increased overall liquidity and a rise in investor appetite for speculative assets, including cryptocurrencies.
Increased purchases of short-term Treasury bills or other supportive measures in this part of the yield curve may ease financing pressure and lower short-term rates. The Fed announced plans for technical purchases of Treasury bills to effectively manage liquidity in the market.
"These issues are separate from monetary policy and have no relation to it," said Fed Chairman Jerome Powell.
The Fed periodically intervenes in short-term funding markets when liquidity imbalances arise. These imbalances manifest in the overnight repo market. The following indicators signal an increase in short-term funding pressure:
High levels of cash in money market funds.
Tightening of Treasury bill issuance after changes in the borrowing structure by the U.S. Treasury.
Seasonal increase in demand for liquidity.
The Fed initiated a controlled plan to purchase short-term government securities (bills) to prevent short-term rates from deviating from the target range of federal funds. Although this is not classical quantitative easing (QE), such a measure could become a significant source of liquidity for the cryptocurrency market.
In the context of the upcoming midterm elections in the USA, scheduled for November 2026, political leadership is likely to lean towards maintaining market stability. Such an environment reduces the risks of sudden regulatory shocks and strengthens investor confidence in risk assets.
"If the U.S. stock market falls before the midterm elections, the current U.S. administration will be held accountable – therefore, it will do everything possible to maintain the situation in stocks (and cryptocurrencies)," writes macro researcher Thorsten Froehlich.
5. Weakening in the labor market
Data on labor market weakening, such as a moderate decline in employment, often prompts the Fed to take softer actions. Deterioration in labor market conditions increases pressure on the regulator to ease monetary policy, which indirectly generates liquidity and creates a favorable environment for the growth of cryptocurrencies.
Optimism of experts and market expectations
Leading industry observers agree with the macroeconomic forecast. Alice Liu, head of research at CoinMarketCap, predicts a recovery in the crypto market in February-March 2026, based on a combination of positive macro indicators.
"We will see a market return in Q1 2026. February and March will again become a bull market, based on a combination of macro indicators," Binance reports, citing Alice Liu, head of research at CoinMarketCap.
Currently, market activity remains subdued, as evidenced by the decline in open interest in bitcoin. However, if the described macroeconomic factors materialize, the current consolidation could rapidly transition into a phase of significant growth, marking a historic beginning of 2026 for crypto markets.
