Analyst Says Fed Rate Cuts and Macro Expansion Could Drive Bitcoin to New Highs in 2026
Market commentator Sykodelic argues Bitcoin’s recent selloff represents a mid-cycle reset rather than a cycle-ending collapse and expects new highs within the year if patterns hold. The analyst identifies an expanded flat A–B–C correction on the weekly chart — an initial drop (A), a rally above prior highs (B), then a final C-wave flush — which often precedes a sharp reversal. Weekly momentum indicators (RSI) have reset toward mid-cycle support rather than long-term bearish ranges. Sykodelic also cites improving U.S. macro data (ISM and related indexes) and anticipates incoming Federal Reserve leadership will cut rates more aggressively than currently priced, boosting risk appetite. He compares Bitcoin’s setup to gold before its breakout, suggesting downside pain is largely priced in and upside moves could arrive quickly. Key takeaways for traders: BTC may be completing a mid-cycle bottom, chart structure supports potential price discovery, macro fundamentals could accelerate a rally if Fed rate cuts materialize, and delayed bullish entries (e.g., waiting for a low in October around $40k) risk missing early upside.
Bullish
The article is bullish because it combines technical and macro arguments that favor an upside scenario for BTC. Technically, Sykodelic identifies an expanded flat A–B–C correction and weekly momentum resetting to mid-cycle support—patterns that historically precede reversals and new highs rather than full trend breaks. Similar setups have preceded previous bitcoin rallies where a C-wave capitulation was followed by rapid price discovery. Macro-wise, improving ISM and industrial data plus the expectation of more aggressive Fed rate cuts increase risk appetite and liquidity—conditions that historically support higher-risk assets like BTC (for example, BTC rallies during easing cycles in 2020–21). For traders: short-term volatility may persist as momentum re-accelerates; break above key weekly resistance would signal a tactical buy and potential price discovery phase. Longer-term, confirmed Fed easing and sustained macro expansion would validate a structurally bullish thesis and could push BTC toward new cycle highs. Caveats: if macro improvements stall or rate-cut expectations are delayed, the bullish thesis may be postponed; false breakouts after C-wave bottoms can also trap early buyers, so risk management (stops, position sizing) remains essential.