Bitwise 2026 Crypto Market Outlook: 3 Critical Tests for the Next Bull Run

Bitcoin and Ether are off to a blistering 7% start just six days into 2026. As of today, Bitcoin is trading at $93,245.92, while speculative tokens like DOGE have surged nearly 29%. However, asset manager Bitwise warns that for this rally to evolve into a sustained climb toward new all-time highs, the market must pass three fundamental tests.

Shaking Off the Ghosts of 2025

The first test is market stability. Matt Hougan, CIO of Bitwise, points out that the fear of forced liquidations—which haunted the market after the October 10, 2025 event—has largely faded. That single-day crash wiped out $19 billion in positions. According to Hougan, the strength seen in early 2026 suggests that the persistent selling pressure from distressed hedge funds and market makers is finally in the rearview mirror.

The Legislative Hurdle in Washington

Progress on U.S. crypto market structure legislation remains the biggest wild card. A crucial Senate Banking Committee markup is targeted for mid-January. While debates over DeFi and stablecoins persist, passing the bill would provide the regulatory certainty needed for further institutional participation. Without it, the current pro-crypto stance remains vulnerable to political shifts in future administrations.

Equity Market Stability as a Safety Net

Finally, the broader economic backdrop must remain cooperative. Crypto doesn't move in lockstep with stocks, but a major equity downturn—specifically a 20% drop in the S&P 500—would likely drag down all risk assets. Current prediction markets show low recession odds, which bodes well for a constructive setup through 2026.