Why This Bull Market Rally Could Extend to 2026: Multi-Dimensional Evidence

The cryptocurrency market has experienced significant turbulence recently, with Bitcoin plummeting from $125,000 to $80,000 before stabilizing. Yet prominent analyst Murad argues this represents a capitulation event within an ongoing bull market, not the cycle’s end. His case rests on extensive technical, on-chain, macroeconomic, and institutional data suggesting the bull market momentum could persist into 2026 and beyond.

Technical Signals & On-Chain Capitulation: Reading the Bull Market Foundation

Multiple technical indicators suggest the market has already shifted from capitulation to recovery. Bitcoin’s weekly RSI reached its lowest point since the FTX crisis—a level only previously seen during the 2018 bear market bottom, the COVID-19 crash, and the 2022 Luna collapse. The daily RSI fell below 21 for the first time in two-and-a-half years, with historical data indicating favorable forward returns when this threshold is breached.

The three-day moving average formed a bullish hammer candlestick pattern, typically signaling potential reversal. Bitcoin remains within an ascending parallel channel dating back to 2023, with the recent decline merely testing diagonal support levels that have held throughout multiple market cycles. On the logarithmic scale, an even longer-term channel—anchored since 2013—remains structurally intact, suggesting the bull market framework hasn’t broken despite recent stress.

The magnitude of the 36% correction, while severe, falls within normal parameters for this cycle. Similar pullbacks occurred in early 2025 (32%) and mid-2024 (33%). The MACD indicator reached all-time lows across 1-day, 2-day, and 3-day charts—an extreme reading historically correlated with capitulation phases that precede significant reversals.

Critical support levels converge around $79,000-$83,000, where the ETF cost base, realized price, and market average price all cluster. This price overlap zone typically functions as reliable support in bull market consolidations. Bitcoin’s bottom near $80,200 represents the true market average price, while $83,000-$85,000 forms the next key support-resistance conversion area.

Institutional Accumulation & Stablecoin Supercycle: Bull Market Fuel

ETF holders have demonstrated remarkable conviction despite the market drawdown. Approximately 98% of assets under management (AUM) in Bitcoin ETFs remain held despite the 36% price decline, reflecting strong long-term institutional confidence in the bull market thesis. The proportion of Bitcoin supply held by ETFs has steadily increased from 3% to 7.1% over two years, a trend observers compare to an “IPO moment” where passive institutional flows continue accumulating despite price volatility.

Exchange outflows reached historic levels following the bottom, a pattern historically associated with market capitulation relief and the early stages of bull market rebounds. The on-chain Realized Net Profit and Loss metric fell to its lowest point since the FTX crisis, indicating complete capitulation from short-term holders while long-term holders largely refrained from panic selling.

Stablecoin supply sits at record highs, with the stablecoin supply ratio at its largest gap since 2022. This concentration of stablecoins on sidelines represents substantial dry powder for buyer accumulation during bull market recoveries. The Fear & Greed Index reached 10/100—the lowest reading in this cycle—yet none of the 30 traditional cycle-top signals have been triggered, suggesting the bull market retains significant runway.

On November 21st, Bitcoin ETF IBIT recorded its highest trading volume ever, alongside record volumes for all Bitcoin ETFs combined and Hyperliquid BTC perpetual contracts. These volume surges historically coincide with major capitulation events and the beginning of bull market rebounds. The liquidation distribution shows significantly more short positions than long positions, with shorts facing much higher liquidation volume, a dynamic supporting potential bull market upside pressure.

Macroeconomic Policy & Institutional Tailwinds

The Federal Reserve has already begun cutting interest rates despite inflation remaining above target, with December rate-cut probability jumping from 30% to 81%. The Fed plans to end Quantitative Tightening in December 2025—a shift widely viewed as positive for risk assets including Bitcoin. Historically, cryptocurrency markets have shown strong performance during Fed balance sheet expansion (2013, 2020-2021) and weakness during tightening cycles (2018, 2022).

The Trump administration has adopted the most supportive government policy environment for cryptocurrency in history, promoting Bitcoin, crypto ETFs, and stablecoins explicitly. Treasury Secretary Bessent has signaled potential bank regulation easing to increase lending to key sectors, effectively loosening monetary conditions. The administration is discussing $2,000 stimulus checks and targeting housing cost reduction to release trillions in home equity into financial markets—stimulative policies that historically support bull market rallies.

The US Dollar Index (DXY) has fallen below and is retesting a key resistance level, traditionally an optimal entry point for purchasing risk assets. Global monetary conditions are also easing elsewhere; China is combating deflationary pressures through implicit monetary support, while Japan announced a $135 billion stimulus package.

The S&P 500 and Nasdaq have shown constructive technical patterns. The Nasdaq 100 found support at the 100-day moving average with bullish MACD signals. Put option volume for the S&P 500 reached historically elevated levels, with historical data showing 100% positive returns one month later in comparable situations. Multiple market breadth indicators—McClellan Oscillator, AAI Bull/Bear Index—suggest high probabilities of upside continuation in the coming months.

Bitcoin price correlation with global M2 money supply growth remains significant. The slow bull market rise in this cycle reflects constrained monetary conditions—interest rates above 4% versus historical 0-2.5% ranges during prior cycles. If M2 growth accelerates alongside Fed policy pivots, Bitcoin could experience renewed parabolic momentum toward the $150,000-$200,000 range discussed in bull market scenarios.

Risk Factors Requiring Attention

Despite extensive supportive evidence, several risks warrant caution. The artificial intelligence stock bubble affecting the Mega 7 tech stocks could burst suddenly, creating broader market contagion. Bitcoin whales have already demonstrated selling pressure and have signaled dissatisfaction with recent protocol updates, potentially accelerating exits if sentiment deteriorates.

A stronger US dollar would pressure all risk assets including cryptocurrencies, counteracting the current DXY weakness. Deteriorating macroeconomic liquidity or reversal in the business cycle could undermine the bull market backdrop, particularly if Fed policy pivots shift unexpectedly.

Conclusion: A Bull Market Cycle Extended Beyond Four Years

The case for bull market continuation into 2026 rests on unprecedented institutional accumulation, extreme oversold technical conditions, full capitulation signals, record stablecoin reserves, and historically supportive macroeconomic policy. Rather than marking the cycle top, the recent decline appears to represent capitulation clearing within an extended bull market that may transcend the traditional four-year pattern.

Current price action near $89,000 reflects early recovery dynamics rather than cycle maturity. While risks exist, the convergence of technical, on-chain, institutional, and macroeconomic factors suggests this bull market has room to extend significantly higher before reaching maturity, potentially justifying continued exposure for those with extended time horizons aligned with the 2026+ bull market timeline.