Will 2026 See Stablecoin and Rate Cut Supercycle or Is Crypto in a Bear Market?

Is crypto in a bear market? Is the four-year cycle broken? Will Bitcoin reclaim $100,000 before year-end? Could 2026 bring about a supercycle? These are all questions being asked by traders and investors as we close out the year, following an ongoing period of bearish price action throughout the crypto market.

Following surprisingly bullish US CPI data yesterday, coupled with an interest rate cut from the Bank of England, investors responded cautiously optimistically, with Bitcoin

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Bitcoin
BTC

$88,145.60

0.69%

Bitcoin
BTC

Price

$88,145.60

0.69% /24h

Volume in 24h

$51.39B
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climbing +1.2% overnight and currently trading just below $88,000.

Just yesterday, the combined crypto market cap was precariously close to $3 trillion. Still, a +1.5% spike has taken it back toward $3.1 trillion, giving it a little breathing room from losing that key level, which would push it back into the $2 trillion range.

Crypto Fear and Greed Chart

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1y
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Is Crypto in a Bear Market? Reasons Why Poor Price Action Could Continue Into 2026

A controversial opinion is that crypto has been in a bear market for a year now. There is some evidence to support this: among the top 50 digital assets with a full year of price history, only privacy tokens Zcash (ZEC) and Monero (XMR) are in the green, along with BNB.

Bitcoin is down -14% year-to-date, while the rest, including household names such as DOT, LINK, ADA, SOL, and

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Ethereum
ETH

$2,954.39

0.23%

Ethereum
ETH

Price

$2,954.39

0.23% /24h

Volume in 24h

$29.23B
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, are down between -50% and -80% over the same period.

In Q4 2025 alone, Bitcoin dropped by more than -30% after falling below $90,000 as it currently ranges between $85,000 and $88,000. While this level of pullback is typical during bull runs, the correction also broke a key support level, prompting many renowned analysts to turn bearish in the mid-term.

One prominent analyst, Peter Brandt, has even called for BTC to crash to $25,000 in 2026, arguing that each bull run brings diminishing returns to the leading digital asset and that previous parabolic runs have all declined by <80%. Brandt further states that the current parabolic advance has been violated and that a 20% decline from the all-time high would bring the price to $25,240.

And while the US and UK are slashing interest rates, the Bank of Japan is raising its rates to the highest levels in 5 years, adding further uncertainty among the global markets, as it could affect the Yen carry trade, which is a popular investment strategy where traders borrow Japanese Yen (JPY) at super low interest rates and convert it to buy higher-yielding assets in other currencies like USD.

JUST IN : Bank of Japan hikes rate to highest level in 30 years pic.twitter.com/5Rdwz2eOEO

— Barchart (@Barchart) December 19, 2025

Global economic uncertainty, the ongoing war in Ukraine, and emerging tensions between the US and Venezuela are among the reasons to be concerned about the state of crypto in 2026, and ongoing bearish price action suggests a yes to the question Is crypto in a bear market?’

Catalysts that Could Bring About a Supercycle in 2026

(SOURCE: DefiLlama)

Liquidity is key, and for everyone shouting that there is currently no liquidity in the market, the reality is that the stablecoin market cap has nearly doubled in the past twelve months, going from $165Bn to just over $300Bn today.

A bullish spin on the question of liquidity could be framed as: now more than ever, the entire crypto ecosystem has an abundance of dry powder ready to enter speculative crypto assets at a moment’s notice.

Then there is the US; regardless of how people feel, it remains the nation to which everyone looks when speculating about future global market movements. It has made three interest rate cuts in 2025, and Polymarket is now pricing a fresh cut for January, which would keep the Federal Reserve’s quantitative easing (QE) policy in place.

(SOURCE: Polymarket)

QE typically increases liquidity in risk-on environments by expanding the money supply and injecting it into the financial system. With lower returns on safe assets like bonds, investors often shift capital into riskier markets, including stocks and cryptocurrencies, during QE in search of higher yields.

Low interest rates and ample liquidity tend to create a “risk-on” sentiment, in which investors feel more comfortable allocating capital to speculative assets such as Bitcoin and the broader crypto market. Historically, periods of significant QE, such as the COVID-19 2020-2022 period, have coincided with crypto bull runs.

Support for the supercycle thesis has been voiced by industry leaders such as Binance founder CZ and Bitmine CEO Tom Lee, as well as numerous prominent analysts and traders.

CZ says crypto could enter a supercycle by 2026, driven by U.S. politics, Fed easing, and institutional adoption.

Bullish pic.twitter.com/KbmACNTFcc

— Bitcoin Teddy (@Bitcoin_Teddy) December 16, 2025

DISCOVER: Top 20 Crypto to Buy in 2025

Inflation Hedge Narrative and Regulatory Advancements: More Reasons Why Crypto Might Explode in 2026

Some investors view Bitcoin and other scarce crypto assets as a hedge against inflation, buying crypto when money is being printed because they worry that fiat currencies might weaken. This narrative gets stronger during QE cycles.

You only have to look back to 2021, at the height of the last US QE cycle, which also saw the biggest crypto bull run in history. Optimistic crypto traders argue that 2026 will mark the start of the next QE cycle and therefore reject the claim that 2025 was the bull run, since it was a year of Quantitative Tightening.

The market structure bill (clarity act) will pass next month!

This is what the US Crypto Industry and HODL are waiting for! pic.twitter.com/kvB6hwnPVB

— Kenny Nguyen (@mrnguyen007) December 19, 2025

Additionally, the White House recently confirmed that the Digital Asset Market CLARITY Act will be taken up by the Senate as early as January. This is not a final vote; it is the committee stage, where the bill is amended and finalized before it reaches the floor. Early signs indicate that the bill will pass with relative ease.

The CLARITY Act aims to clarify which tokens are treated as securities and which as commodities, and to split oversight between the SEC and the CFTC evenly. If it passes, crypto companies in the US will finally receive a more transparent regulatory framework rather than regulation through protracted court cases.

EXPLORE: Best Meme Coin ICOs to Invest in 2025

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