Analysis: The Crypto Market Needs to Undergo a "Reset Period" Before a New Bull Run Can Begin

Odaily According to Interactivecrypto, since Bitcoin hit its all-time high of $127,000 in October 2025, the market experienced a swift correction to around the $60,000 range in Q1 2026. Despite the intense volatility, this is fundamentally a normal cyclical adjustment process of "deleveraging + liquidity contraction." Analysis suggests that the current pressure on the crypto market primarily stems from a global tightening of liquidity, including factors such as the Federal Reserve's balance sheet reduction, a strengthening US dollar, capital diversion from IPO financing, and rising pressures in credit markets. Against this backdrop, crypto asset prices often become "decoupled" from fundamentals in the short term, with declines serving to clear the market and reset the cycle.

From a cyclical structure perspective, 2026 may present a "multi-stage recovery": a bottoming-out and deleveraging phase early in the year, followed by a mid-term staged rebound, and potentially further consolidation later before entering a more sustainable upward trajectory. Similar patterns have been observed in multiple past crypto cycles. The current stage calls for a defensive portfolio allocation, gradually increasing risk exposure as liquidity conditions improve. 2026 is more likely to be a "transitional year" rather than a one-sided bull or bear market. However, this round of "reset" may lay the groundwork for the next upward cycle. (Interactivecrypto)