Crypto needs a reset before the next bull run

Despite Bitcoin's significant drop from its 2025 high, the current market turbulence in early 2026 is viewed as a necessary reset mechanism, not a sign of a broken long-term cycle. The primary driver of this pressure is contracting global liquidity, stemming from the Federal Reserve's balance sheet reduction, tax payments, and capital absorption by IPOs. This environment rewards caution, suggesting 2026 will be a multi-step transition year characterized by volatility and retesting lows, rather than a clean rebound. However, the long-term outlook remains constructive due to deeper institutional demand, stronger infrastructure, and the potential for future monetary easing by the Fed. Investors are advised to remain defensive initially, gradually increasing exposure as stabilization occurs, and focusing on active strategies to capitalize on mid-cycle dislocations, positioning for the next durable rally by timing exposure to improving liquidity conditions.

(Source：CoinDesk)