Bitcoin is currently facing downward pressure due to uncertainty surrounding interest rate policies, inflation expectations, an MSCI review related to crypto companies, and stress in Bitcoin derivatives. A list of crucial factors that could influence a return to its previous high of $112,000, last achieved four weeks ago, follows:

• Key Takeaways:
  1. Bitcoin derivatives and cautious interest rate expectations contribute to a subdued sentiment, although better liquidity conditions present opportunities for growth.
  2. Regulatory support and MSCI’s examination of firms heavily invested in Bitcoin might boost risk tolerance, paving the way for a more favorable medium-term perspective for Bitcoin.

Presently, Bitcoin (BTC) remains capped beneath $92,000, marking a 22% decline over the past month. Anticipation grows that various governments will augment their monetary supply to bolster struggling economies and manage increasing fiscal debts. Conversely, some skeptics point to weak labor indicators and escalating concerns related to emerging AI investment trends.

Affirmatively, both arguments hold weight, and the recent downturn may set the stage for a more robust Bitcoin rally. Critical factors will shape the pace of Bitcoin’s approach to the significant price level of $112,000 witnessed four weeks in the past.

Potential Triggers for Bitcoin’s Rally

A notable transformation within the financial landscape may emerge in the first half of 2026, coinciding with the conclusion of Jerome Powell’s tenure as the Federal Reserve Chair. The upcoming changes may align with political preferences that lean towards a softer monetary policy, as highlighted by Trump’s apparent intention to nominate a candidate advocating for such stances.

Additionally, recent reports indicate a relaxation of capital requirements for major banks by January 1, 2026, a move that could inspire growth in risk-oriented assets like Bitcoin. This information suggests that the Trump administration may be focused on stimulating economic expansion through heightened government borrowing, including proposed legislation introduced earlier this year.

In the Bitcoin ecosystem, changes may also arise due to MSCI’s proposal to exclude entities primarily investing in Bitcoin from its index, with findings expected by mid-January.

Future Perspectives

Though Bitcoin derivatives have encountered continued challenges recently, the need to restore confidence appears essential before achieving upward momentum beyond the $112,000 threshold, likely during the first half of 2026.