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Bitcoin has performed poorly during the last three midterm election years. In 2014, Bitcoin dumped 59%. In 2018, Bitcoin suffered essentially the most, 75%. 2022 has seen a number of blood too, with a 64% drop. But why is that relevant?
Because 2026 is the following midterm election 12 months. We are two weeks away from 2026! So, will 2026 follow the previous midterm election years? Let’s discover what this implies for crypto.
S&P 500 Performance
Before we check Bitcoin, let’s check the macro market. Why? The midterm election is a political event, and whether it is indeed bearish, the macro market could also be affected too. Here is the annual performance of S&P500 since 1930.
Let’s filter in response to midterm election years. There have been 11 bullish years, 11 bearish years, and a couple of neutral years. This means there’s NO evidence of a macro bearishness specifically in midterm election years. It may very well be bullish or bearish depending on the general market.
Even because the origin of Bitcoin, from 2010, there have been two bullish years and two bearish years. The midterm election is a cyclical event. It happens every 4 years. However, the market has NO such cycles. Bitcoin has a 4-year cycle, due to halving.
The halving happened in 2012, 2016, 2020, and 2024. Halving is a bullish event, and it is kind of natural that there are bearish years in between these bullish events. And remember, without bearish years, there won’t be bullish years. The point is there isn’t a relation between the midterm election and S&P500 performance. That’s the thing to recollect.
Why Bitcoin Was Bearish In Midterm Election Years
It’s happened all 3 times we’ve had midterm elections during Bitcoin’s existence. Down every time. Let’s see why. Let’s consider annually.
1) 2014
Bitcoin dumped from $1000 to $111 in 2014. Why? Mt Gox, the largest crypto exchange at the moment, collapsed, and filed for bankruptcy. Mt Gox had the identical market dominance that Binance commands straight away. The exchange balance has been in a gradual uptrend since 2014, and in a slow downtrend since 2022.
This uptrend is due to high inflation state of Bitcoin on the time. After 2020, Bitcoin inflation (Bitcoin rewards) is low, and the exchange balance has been taking place.
2) 2018
2018 was the worst possible 12 months for Bitcoin. Is it due to midterm elections? Not in any respect. In 2017, the ICO bubble reached an unsustainable state. This caused massive market corrections.
2017 had seen unprecedented gains in crypto. This invited sustained political intervention into Bitcoin. Following that, web2 giants like Facebook, Twitter, Google, etc. banned ICO ads on their platforms.
This also signifies that the 2018 midterm election had nothing to do with the Bitcoin price motion.
3) 2022
In 2022, two major bearish events happened. The first was Terra Luna and UST collapse.
Terra and Do Kwon had a method to purchase Bitcoin and use it to back its stablecoin UST. When UST lost its peg initially, Terra dumped Bitcoin available on the market to save lots of UST and LUNA. Those efforts failed and kickstarted the 2022 bear market.
But that was not it. Soon, FTX collapsed, mimicking the Mt Gox collapse. This also fueled distrust in crypto, adding to the NFT and Metaverse bubble. But how can such coincidence occur? Ian Fleming says
“One time is happenstance. Two times is coincidence. Three times is enemy motion.” So thrice in a row can’t be a coincidence, right? Well, it may very well be. We need enough historical data to attract conclusions, and there is just not enough data to predict that 2026 may very well be bearish as well.
Will 2026 Be Bearish?
Here comes the direct query – is it possible that 2026 is a bearish 12 months. There is a possibility. It has nothing to do with the midterm election, though. Bitbo has a halving chart that explains how 2026 may very well be bearish. The mid-year of halving has been bearish.
Check 2014. 2012 to 2014 had been extremely bullish, and 2014 was a cool off 12 months. In 2015, Bitcoin began its recovery and entered the bull market. 2018 tells an analogous story. Explosive growth from 2016 to 2018. Cool off in 2018, and recovery began in 2019.
2022 follows the identical trend. Bitcoin pumped from 2020 to 2022. Dumped in 2022, and recovery began in 2023. If the history repeats, 2026 may very well be bearish, and 2027 could see further bullishness in preparation for the 2028 halving.
However, the expansion between 2024 and 2026 has been slow. If Bitcoin has not pumped high, there isn’t a logic in massive corrections. Let’s return to the Bitcoin circulation chart.
Since 2010, Bitcoin inflation has been regular and aggressive. The inflation slowed down in 2020, and the primary demand driven pump happened. This was supported by the post-covid global market recovery.
In 2024, institutional demand fueled the pump. This was supported by the dropping exchange balance. When the provision goes down together with the demand, the volatility comes down. By 2028 halving, Bitcoin will probably be a completely adopted institutional asset. Strategy and BlackRock has been buying BTC, they usually will probably be greater than completely satisfied to purchase more when Bitcoin is reasonable.
It implies the retracement that might occur in 2026 may very well be a sideways market, at best. The excellent news is that we don’t must wait long to figure it out. The worst happens in January and February of such years. If 2026 starts in a bearish tone, it’s possible the 12 months will probably be bearish.
Onchain-wise, Bitcoin stays strong and healthy. The next big crisis may very well be from quantum computing. Quantum computing can crack how private keys are created. This is something we will probably be watching. This rumor could trigger a bear market, but not anytime soon.
Disclaimer
The information provided by Altcoin Buzz is just not financial advice. It is meant solely for educational, entertainment, and informational purposes. Any opinions or strategies shared are those of the author/reviewers, and their risk tolerance may differ from yours. We usually are not responsible for any losses you could incur from investments related to the data given. Bitcoin and other cryptocurrencies are high-risk assets; due to this fact, conduct thorough due diligence. Copyright Altcoin Buzz Pte Ltd.
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