Bitwise outlines three conditions for Bitcoin to reach new highs in 2026

Bitcoin and ether have kicked off 2026 on a strong note, but whether the rally can be sustained will depend on three key factors, according to digital asset manager Bitwise.

In a recent blog post, Bitwise said the risk of forced liquidations stemming from last year’s market selloff has largely faded. Concerns that major market makers or hedge funds might be forced to unwind positions appear to have eased, with early-2026 price strength suggesting the market has moved past that overhang.

The next major test lies in Washington. Proposed U.S. crypto market structure legislation is moving through Congress and is seen as a critical milestone for the industry. Bitwise warned that without clear legislation, the current relatively pro-crypto regulatory stance could be reversed by a future administration, leaving the outlook cautiously optimistic but still unresolved.

The final factor is the broader equity market. While crypto does not always move in lockstep with stocks, a sharp downturn — such as a 20% decline in the S&P 500 — would likely pressure all risk assets in the short term.

Overall, Bitwise said the setup for crypto in 2026 remains constructive, supported by rising institutional adoption, growing use of stablecoins and tokenization, and the lagged benefits of a more supportive regulatory environment that began in early 2025. If policy progress continues and equity markets remain relatively calm, the firm believes crypto’s early momentum this year could prove durable.