Bitwise Predicts New Bitcoin All-Time Highs for 2026 – But Bear Market Threatens in Short Term

Optimistic Long-Term Forecast Meets Short-Term Uncertainty

The crypto market is currently divided: While major asset managers like Bitwise are forecasting new all-time highs for 2026, market sentiment has reached extreme fear levels. Bitcoin is currently consolidating at $86,509, while macroeconomic factors are creating uncertainty ^[2].

Bitwise Expects End of Four-Year Cycle

Crypto asset manager Bitwise has published its latest forecast report for the coming year, painting a clearly bullish picture for 2026 ^[1]. The research team led by CIO Matt Hougan expects Bitcoin to break free from its historical four-year cycle and reach new all-time highs. "We expect Bitcoin to set new all-time highs and for the four-year cycle to disappear," the analysts write in their outlook for 2026 ^[1].

Supply-Demand Dynamics as Price Driver

As structural reasoning for this optimistic forecast, Bitwise points to the sharply increased institutional demand since the approval of spot Bitcoin ETFs in 2024 ^[1]. The numbers speak for themselves: The ETFs alone have purchased more than 700,000 Bitcoin since launch, while only around 360,000 new Bitcoin were created during the same period ^[1]. "It doesn't take a PhD in economics to recognize that 710,000 is significantly more than 360,000," the report states ^[1]. This supply-demand dynamic forms a "strong foundation for Bitcoin's price development" ^[1].

Additionally, Bitwise expects a further decline in volatility. Bitcoin was at times less volatile than Nvidia stock in 2025 ^[1]. "Bitcoin's volatility has continuously declined over the past ten years," the analysts note ^[1]. The cause is the broader investor base through regulated products like ETFs, a trend that is likely to continue ^[1].

Critical Support Level at $81,500

However, the short-term picture looks different: At 17 out of 100 points, the Fear and Greed Index is in extreme fear territory ^[2]. Ethereum is losing more significantly, trading down 3.8 percent at $2,829 ^[2].

The backdrop is macroeconomic uncertainty. The U.S. Census Bureau released new inflation figures on December 18, with forecasts pointing to values around 3.0 percent ^[2]. High inflation would be a bad sign for risk assets like Bitcoin, as central banks would be more reluctant to implement further interest rate cuts ^[2]. The upcoming interest rate decision by Japan's central bank BoJ on December 19 is also weighing on markets, with a rate hike considered certain ^[2].

An important support level is the so-called True Market Mean at $81,500 ^[2]. This metric represents the average entry price of all active market participants, excluding miners ^[2]. If Bitcoin falls below this mark, a cascading selloff threatens ^[2].

Institutional Investors Accumulating

A glimmer of hope comes from the ETFs: On December 17, a total of $457 million flowed into the Bitcoin ETFs from BlackRock and others ^[2]. Institutional investors are thus using the pullback for accumulation ^[2].

The bottom line is that Bitwise sees several positive factors for the price simultaneously: institutional capital inflows, regulatory progress, and declining selling interest ^[1]. "The positive trends are too strong and too far-reaching to be permanently suppressed," the conclusion reads ^[1].