Bitwise Flags Three Conditions Crypto Must Meet To Reach New All-Time Highs In 2026 ⋆ ZyCrypto

The cryptocurrency market started 2026 on a strong footing, but reaching new peaks this year will depend on clearing three key hurdles, according to Matthew Hougan, Chief Investment Officer of Bitwise.

3 Catalysts For New Highs In 2026

“Crypto is off to a good start in 2026,” Matt Hougan wrote in a note on Tuesday, but added there are “three big hurdles standing between us and new all-time highs.”

Bitcoin (BTC) and Ethereum (ETH) are both up about 7% year-to-date, with speculative tokens registering even bigger gains. For instance, leading memecoin Dogecoin (DOGE) is up around 29%, an indication that risk appetite is returning to the market. However, prices retraced on Wednesday, sparking questions over whether the new year rally has the momentum to continue.

According to Hougan, the first and most immediate obstacle has already been cleared: dodging another major market shock, such as the Oct. 10, 2025, liquidation event, when nearly $20 billion in crypto futures positions were wiped out in a single day.

In the months that followed, investors worried that big market makers or hedge funds might be forced to unwind positions, weighing on prices. Hougan noted that those fears have since eased, stating that any major wind-downs likely would have happened by year-end. “One of the reasons I think we’ve rallied to start this year is that investors have put Oct. 10 in the rearview,” he added.

The second condition, in Hougan’s opinion, centers on U.S. legislation. The proposed U.S. crypto market structure bill, known as the Clarity Act, is moving through Congress, with a Senate Banking Committee markup targeted for January 15, though this date needs official confirmation.

Though disagreements remain around issues such as decentralized finance (DeFi) regulation, stablecoin rewards, and political conflicts of interest, Hougan contended that passage of the bill would mark a watershed moment.

“Passage of the CLARITY Act is key to the long-term future of crypto in the US [and would] enshrine core principles into law and provide a strong foundation for future growth,” Hougan postulated.

The final test is a stable equity market backdrop, the Bitwise exec noted. While Hougan outlined that digital assets don’t need a booming stock market to perform well, he warned that a sharp selloff, such as a 20% correction in the S&P 500 index, would likely drag all risk assets down in the short term.

“If we hit the three milestones above, I think 2026’s early momentum will have some serious legs,” he summarized.

Bitcoin was down about 2.5% over 24 hours, to trade hands at $90,190.22 as of publication time, according to CoinGecko data.