[January 2026 Edition] Will Bitcoin Price Recover? Halving Cycles and the 2026 Outlook

Looking Back at the Turbulence of 2025: From $126,000 to $92,000

Bitcoin (BTC) experienced dramatic price fluctuations in 2025. After hitting an all-time high in February and reaching $126,000 in October, it plummeted in November without a clear trigger. It briefly fell to the $92,000 range, effectively wiping out its gains for the year. This development resulted in the loss of approximately 93 trillion yen in market capitalization.

What the November 2025 Plunge Indicates: Warning Signs from the Options Market

Matt Hougan, Chief Investment Officer at Bitwise Asset Management, analyzes that "investors fearing a repeat of the four-year cycle and wanting to avoid a 50% drop are preemptively exiting the market."

Of particular note is the construction of extreme bearish positions in the options market. The table below shows the state of the options market as of November 2025.

Factors That Drove BTC Price in 2025

The Trump administration's cryptocurrency-friendly policies and the "Strategic Bitcoin Reserve" initiative were anticipated as moves to recognize BTC as a national-level asset. Bitcoin ETFs approved in 2024 also began full-scale operations, realizing capital inflows from institutional investors.

However, even with support from Wall Street and political tailwinds, the current market has rapidly retreated. Without established correlations or risk management frameworks, traders are focusing on the historical model of the halving cycle.

As this table shows, put options are being purchased at more than 3.5 times the rate of call options, making it clear that traders are preparing for the risk of a decline into the $80,000 range. Such an extreme bearish trend is at levels not seen since the collapse of FTX in 2022.

Despite institutional support and political tailwinds—such as the Trump administration's crypto-friendly policies, the "Strategic Bitcoin Reserve" initiative, and the full-scale operation of Bitcoin ETFs approved in 2024—the market has rapidly retreated. Traders have been forced to focus on the historical model of the halving cycle.

Will Bitcoin Recover in 2026?

2026 Outlook Based on Halving Cycles

Bitcoin has an event called a "halving" approximately every four years, where mining rewards are cut in half, slowing the pace of supply growth. Analyzing past data reveals a recurring pattern where the price peaks approximately 18 months after the halving, followed by a correction phase.

Bitcoin, which underwent its fourth halving in April 2024, reached a peak of $126,000 in October 2025, following this pattern. In other words, the decline since November 2025 can be interpreted as a typical correction phase following a post-halving peak. Looking at past cycles (2012, 2016, 2020), after experiencing a correction of around 30–50% from the peak, the price gradually consolidates its bottom as the next halving approaches, before turning back into an upward trend.

If this pattern repeats, a recovery phase could begin between late 2026 and 2027. However, as of January 2026, it is still trading in the $95,000–$105,000 range, leaving the possibility of further adjustments.

Institutional Investor Trends Are Key

There is one difference from the past this time. Moves by companies like Metaplanet and MicroStrategy to hold Bitcoin on their balance sheets are accelerating. Metaplanet has announced its goal to acquire 210,000 BTC by the end of 2027, and such large-scale buying could suppress further declines.

As of January 2026, a cumulative total of approximately $100 billion (about 15 trillion yen) has flowed into Bitcoin spot ETFs, and institutional entry continues. However, the current challenge is a "lack of conviction-based buying demand." With buyers who accumulated positions over the past six months holding significant unrealized losses, it is difficult for new buying demand to enter.

Expert Price Forecasts for 2026

Despite market turmoil, some experts still predict a recovery in the long term. However, the following forecasts were released before the sharp decline in late 2025 and deviate significantly from the current market environment.

However, these forecasts were released before the current plunge and may be revised downward due to worsening market sentiment.

*These forecasts require re-verification based on the market environment as of January 2026. Many analysts are likely to revise their forecasts downward following the sharp decline since November 2025. Realistically, a growing number of cautious observers believe that a recovery to the $120,000–$150,000 range during 2026 would be a good outcome.

Risks Hindering a 2026 Price Recovery

Deepening Post-Halving Correction

In past halving cycles, the market has experienced corrections of over 50% after the peak. We cannot rule out the possibility that BTC, currently trading at $95,000–$105,000 as of January 2026, could fall further to $80,000 or below. As indicated by the aforementioned options market data, professional traders are seriously anticipating a drop into the $80,000 range.

Worsening Sentiment and Liquidity Dry-up

With retail investor sentiment at an extreme low, it is difficult for new buying demand to enter. There is also a risk of a chain reaction of stop-loss selling by investors holding unrealized losses.

Regulatory Risks and Macroeconomic Uncertainty

Moves by governments to strengthen regulations, concerns about economic recession, and shifts in liquidity due to interest rate trends are also factors that could delay a recovery. The direction of the Fed's monetary policy in 2026 will be particularly important.

How Should You Invest in the Current Market?

Opportunities for Long-Term Investors

The current correction phase can be viewed as an entry opportunity for long-term investors. Looking at past cycles, the market has turned back into an upward trend after corrections. However, considering the possibility of further declines, a phased investment approach is wise.

Risk Mitigation with Dollar-Cost Averaging

Predicting the market bottom is difficult. With "dollar-cost averaging," where you invest a fixed amount regularly, you can reduce the risk of buying at the top and lower your average acquisition cost. For example, if you invest 30,000 yen every month, you buy less when the price is high and more when it is low. At WEEX, make it a habit to log in and purchase on a fixed day each month.

Thorough Risk Management Is Paramount

In an unstable market like the current one, risk management is more important than ever. It is essential to invest only within the scope of your surplus funds and to diversify into other asset classes besides Bitcoin. Follow the principles of setting clear stop-loss lines (e.g., re-evaluating if it breaks $80,000) and being cautious with leverage trading (which beginners should avoid).

Conclusion: Viewing the Correction Phase Calmly

Bitcoin has been in a severe correction phase since November 2025. It plummeted from an October peak of $126,000 to the $92,000 range and continues to trade in the $95,000–$105,000 range as of January 2026. As the options market data shows, professional traders are seriously wary of the risk of a drop into the $80,000 range, so optimism is prohibited.

However, looking at past halving cycles, such corrections are within the expected range. The important thing is to calmly assess the current market environment and make investment decisions tailored to your own risk tolerance. Invest within the scope of your surplus funds and utilize risk-mitigating investment methods such as dollar-cost averaging. Managing your funds while anticipating the possibility of further declines and maintaining a long-term perspective, rather than being swayed by short-term price fluctuations, is the key to success.

WEEX provides a safe and easy-to-use trading environment to support your cryptocurrency investments. Register for an account or log in to WEEX now to start investing with proper risk management.

Frequently Asked Questions

Q: Will Bitcoin recover in 2026? 

A: Judging from past halving cycles, there is a possibility that a recovery phase will begin between late 2026 and 2027. However, this is not certain, and the possibility of further corrections should also be considered.

Q: Is now a good time to buy?

A: If you are a long-term investor, the current $95,000–$105,000 range is quite attractive. However, it is wise to invest in stages using dollar-cost averaging.

Q: How low could it go? 

A: Since there were corrections of around 50% in past cycles, the possibility of it falling into the $60,000 range is not zero. Looking at options market data, professional traders are wary of the $80,000 range.

Q: Is ETF capital inflow continuing? 

A: Yes, it reached a cumulative total of $100 billion as of January 2026, and institutional entry is continuing. However, the monthly inflow pace has slowed.

Q: Will the halving cycle continue to function in the future?

A: Since the same pattern has been seen in the past three instances, it is highly likely, but as the market matures, the multiplier for price increases is decreasing. We should not expect as rapid an increase as in the past this time.

Disclaimer

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