Bitcoin in 2026 stands at a crossroads of fate. From the peak of $126,000 last October, it has fallen to its current $67,000, with a market value evaporating by over a trillion dollars, and nearly 45% of holdings in the network are entangled in losses.
The "four-year cycle" curse after the halving has failed for the first time, replaced instead by a deep connection to the pace of Federal Reserve policies. Wall Street giants are rarely divided at this moment: on one side, JPMorgan is shouting a long-term target of $266,000, while Standard Chartered warns “first explore $50,000 before talking about a rebound.” Behind this confrontation of bulls and bears is the painful birth that crypto assets must experience on the road to maturity.
1. Divided Wall Street: The Huge Divide from $170,000 to $50,000
● In the early 2026 institutional forecast list, the numeric divide between optimists and pessimists has expanded to a dizzying degree.
○ Based on a risk-parity model between Bitcoin and gold, JPMorgan reiterated its long-term target price of $266,000, believing that once negative sentiment reverses, Bitcoin will once again become the digital gold that hedges against catastrophic events.
○ In the middle to short-term dimension of 6 to 12 months, the bank gave an optimistic expectation of $170,000, supported by expectations for a rebound in institutional fund inflows and the advancement of regulatory frameworks such as the U.S. Clarity Act.
● Similarly, Standard Chartered, another top investment bank, expresses a chilling attitude.
○ Jeff Kendrick, head of digital asset research, wielded the axe for the second time in three months, lowering the year-end target from $150,000 to $100,000. Even more alarming is his short-term warning: Bitcoin might first fall to $50,000, with Ethereum also seen at $1,400.
○ The logic of the downgrade points directly to two hard injuries - nearly $8 billion has flowed out of Bitcoin ETFs since October 2025, with the number of holdings decreasing by about 100,000 BTC; meanwhile, the average cost of holdings for ETF investors is as high as $90,000, meaning that current buying in this price range has been "trapped," making it difficult to trigger bottom-buying willingness.
● Between the two giants, Bernstein maintains a target price of $150,000 for 2026. Analyst Gautam Chhugani categorized the current decline as a “crisis of confidence rather than structural damage,” and referred to it as the "weakest bear market" in Bitcoin's history.
○ Supporting this judgment is the deepening institutional process: net inflows into spot ETFs have reached hundreds of billions of dollars, with recent outflows only accounting for about 6% of the total, and 17 of the top 25 ETF holders have increased their positions against the trend in the fourth quarter.
2. The Underflow Behind the Trillion Evaporation: Who is Leaving and Who is Staying?
● Beneath the appearance of nearly halved prices, the market structure is undergoing subtle changes. The proportion of whales on exchanges shows that the recent influx of Bitcoin into exchanges comes primarily from large holders, and this concentrated inflow seems more like a strategic sale rather than a panic exit—large holders are orderly unloading at key positions or fixed time intervals, indicating intentional layouts.
● However, contrarian investors see a different picture. Brett Munster of Blockforce Capital points out that ETF capital outflows need to be interpreted in a broader context: since the launch of the spot Bitcoin ETF in January 2024, billions of dollars have been accumulated, and recent outflows account for only 6%, which indicates that investor groups are consolidating positions rather than exiting in panic.
● Fidelity's observations go further: listed companies and spot ETFs currently together hold nearly 12% of Bitcoin’s circulating supply, and since early 2020, the total holdings of listed companies have almost increased every quarter, forming a "demand base" that did not exist in previous cycles— the supply pool held by entities with a long-term vision is expanding, and they are very reluctant to sell in weakness.
● Donor funds from universities like Harvard and Dartmouth continued to hold cryptocurrency ETFs in the recent quarter, while Laurore Ltd. from Hong Kong made a significant entry by increasing its holdings in BlackRock’s Bitcoin ETF by 8 million shares. The "lock-up effect" of these long-term funds stands in stark contrast to the institutional chain reactions during the 2022 FTX collapse. As Bernstein stated: “No institutional collapse means no hidden time bombs surface.”
3. Production Costs and Liquidity Traps: The Support Test at $77,000
● JPMorgan analysts pointed out a key number in their latest report: $77,000. This is the bank’s estimate of the current Bitcoin production cost, which historically has served as a "soft bottom line" for prices.
● The drop in costs is due to a recent decline in network computing power and mining difficulty—so far this year, mining difficulty has decreased by approximately 15%, the largest drop since the crackdown on mining in China in 2021. High-cost miners are forced to shut down, while remaining miners capture market share; computing power has shown signs of rebounding, which means that production costs may rise again during the next difficulty adjustment.
● However, this cost defense line is facing the test of a liquidity collapse. Coinbase's "field manual" provides two decisive price ranges: upward, $82,000 is the first resistance door, and downward, $60,000 is the shelf that must be defended. If it falls below this, it may accelerate the decline.
● This judgment combines with options gamma exposure—there is a "significant negative gamma zone" in the $60,000 to $70,000 area, which means that if the price falls below $60,000, the hedging behavior of market makers may amplify selling pressure; while in the $85,000 to $90,000 area, a "meaningful positive gamma pocket" could make the upward process slower and more likely to stall.
● Liquidity itself is also creating volatility. Traders generally report that the current order book on exchanges is "extremely thin," with sell liquidity retreating ahead of the U.S. presidential address, resulting in small buying pressures being able to penetrate the order book. This state of liquidity vacuum makes maneuvers around $66,000 feel more like a tentative skirmish.
4. Scarcity Debate and Derivatives Pricing Power
● Luke Nolan, a senior researcher at CoinShares, pointed out that spot ETFs must actually custody Bitcoin; only in 2025 will the holdings of ETFs and corporate treasuries increase significantly, leading to the actual supply being withdrawn from the market.
● It is expected that 4 million Bitcoins will permanently disappear due to lost keys, and the actual circulating supply is far lower than the nominal stock. Derivatives indeed dominate marginal price discovery—the CME futures open interest once surpassed Binance, with institutions expressing views through derivatives, then transmitting it to the spot market via basis trading, but none of this changes the hard cap of 21 million.
● The essence of this debate is the migration of pricing power. The derivatives market has become the main venue for institutions to express views on Bitcoin, while the spot market increasingly serves as a settlement and inventory layer. However, as institutions allocate assets through ETFs and digital asset treasuries, Bitcoin ultimately flows to long-term holders who deeply understand its value proposition, rather than to speculative players who only pursue short-term arbitrage.
5. Outlook for 2026: Waiting for the Starting Gun Amidst the Pain
● As we stand at the end of February, both bulls and bears still have ample ammunition. Global net inflows into crypto ETPs reached $87 billion, with market depth far exceeding previous cycles. However, short-term limiting factors are also evident: expectations for Federal Reserve rate cuts have been pushed to the second half of the year, and uncertainty regarding policies will continue to suppress valuations of risk assets until Kevin Warsh takes office as Chairman of the Federal Reserve in June.
● Several signals worth noting:
○ The correlation between Bitcoin and gold is being repaired; as precious metals warm up, the crypto market still pays a premium for downward protection;
○ More than half of the major banks in the U.S. have launched or are developing crypto-related products; the establishment of this infrastructure will release purchasing power far beyond previous levels when sentiment shifts again;
○ The total supply of stablecoins is expected to grow by 56% to $420 billion by 2026, while tokenized real-world assets may jump from $37 billion to $80 billion.
● Matthew Hougan, Chief Investment Officer of Bitwise, perhaps summarizes it best: “All the reasons that have driven Bitcoin's rise over the past 15 years still hold - the world is becoming more digital, global concerns about fiat currency are increasing, and regulations and access conditions continue to improve, while the demographics of the crowd that grows with Bitcoin are becoming wealthier and older each year.”
Whether 2026 can break new highs depends on the resonance of three variables: when the flow of ETF funds reverses, whether the $60,000 support can hold under negative gamma pressure, and when the Federal Reserve’s policy signals become clear. Although Standard Chartered has lowered its year-end target to $100,000, this still implies about a 50% upside from the current price; JPMorgan's $266,000 long-term target feels more like a shot in the arm—provided that Bitcoin can regain trust equal to that of gold.
The market always clears in pessimism and starts in hesitation. When the most pessimistic scenarios are fully priced in, the only thing left is how to restart confidence.
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