Four factors that will drive the Bitcoin price into 2026. ‘Nothing stops this train’

Bitcoin missed St. Nick’s sleigh this year.

Instead of a festive Santa rally, the top crypto is trudging into Christmas down 30% from its October all-time high despite macroeconomic tailwinds.

While a “goldilocks” mix of a global rate cut cycle and rising liquidity have driven strong returns across stocks and gold, Bitcoin has disappointed investors, analysts David Brickell and Chris Mills of the London Crypto Club said in their weekly newsletter.

“Despite all of the positive idiosyncratic drivers for Bitcoin, with the progress of a supportive US administration reinforcing the institutional adoption story, and despite making record highs above $126,000 in early October, Bitcoin as we write, is down circa 5% year-to-date vs the USD and ~40% Vs gold,” the pair said.

Bitcoin price in 2025.

Here are four reasons why Bitcoin’s price is down in the last stretch of 2025, according to Brickell and Mills.

Persistent ‘mechanical’ supply

Bitcoin’s underperformance in recent months is rooted in steady, price-insensitive selling, Brickell and Mills said.

“We’ve seen substantial selling from long-term ‘OG’ holders who, having held through multiple cycles, began distributing aggressively around the psychologically important $100,000 level,” they said.

That strategic selling is weighing on Bitcoin’s price despite otherwise supportive fundamentals.

Four-year cycle trap

Self-reinforcing belief in Bitcoin’s four-year cycle is also working against price as traders seek to front-run each other, Brickell and Mills said.

Roughly every four years, Bitcoin goes through an event called a halving. The event cuts the rewards paid to miners for creating new blocks in half.

This reduces the supply of new Bitcoin entering the market — and amps up the pressure on Bitcoin miners.

In past cycles, prices have tended to rise strongly in the months after a halving, then peak, and later fall as excitement fades and early investors take profits.

Because this pattern has repeated several times, many traders now expect it to happen again, and they act on that belief by selling.

To be sure, a growing chorus of voices is arguing that the four-year cycle narrative should be relegated to the dustbin of history.

Grayscale and Bitwise analysts as well as Binance co-founder Changpeng Zhao are just some of the people saying that institutional adoption, regulatory clarity and the maturity of the crypto industry means the factors that drove previous halving cycles are significantly weaker.

Even so, it’s clear that far from every trader is willing to give up on their four-year cycle strategies just yet.

AI bubble fears

The artificial intelligence trade, once the broader market’s engine, started to wobble in the second half of 2025.

As skepticism grew around valuations and monetisation timelines, momentum investors pulled back from risk assets, the analysts said.

In normal conditions, Bitcoin behaves like a liquidity sensitive risk asset. When risk appetite faded, crypto faded with it. That dynamic mattered more than any single crypto unique catalyst.

Red October

October’s sharp $19 billion liquidation event delivered an enduring blow, Brickell and Mills said.

While Bitcoin’s price recovered quickly on the surface, deeper damage lingered.

Liquidity providers and market makers that absorbed forced selling appear to have steadily reduced exposure afterward, creating a persistent overhang into year end, the pair said.

2026 outlook

Despite the decline, Brickell and Mills remain bullish on Bitcoin’s price in the long term.

“The debt driven, fiat based system requires ever more debt and deficits to survive, requiring ever expanding central bank balance sheets to fund those deficits and provide liquidity to the market via money printing,” they said.

“Literally nothing stops this train.”