If you've been waiting for Bitcoin (BTC) to roar back to life this year, you might want to get comfortable. According to Alice Liu, Head of Research at CoinMarketCap, the crypto market has entered a phase of extreme fear and wild volatility, and the next true expansion cycle probably won't show up until 2026.
Fear, Volatility, and a Missing Bull Run
Speaking at Blockchain week on Tuesday, Liu pointed to Bitcoin's recent slide below $85,000, which sent the Fear & Greed sentiment gauge plummeting to a record-low 11—classified as "extreme fear." The long-awaited October bull run never happened, liquidity remains thin, and prices are swinging in exaggerated moves.
What's driving the malaise? Macro uncertainty combined with institutional pullback. November alone saw roughly $2.8 billion in ETF outflows, which is suppressing demand and making 2025 a high-risk year for crypto investors.
Liu tracks three key dimensions to assess market health: macro conditions like liquidity and interest rates, institutional flows including ETF positioning, and on-chain metrics such as wallet activity and supply dynamics. Right now, macro and flow indicators are both weak. Add in year-end portfolio rebalancing—when investors trim positions rather than deploy fresh capital—and the outlook gets even murkier. Her advice? Don't expect a Santa rally. Focus on survival and selective accumulation.
What Could Ignite in 2026
Despite the near-term gloom, Liu sees a stronger setup forming for 2026. She highlighted three sectors likely to outperform when the next cycle ignites: prediction markets, which offer real utility and fast-growing user adoption; perpetual DEXs, benefiting from rising volumes and more sophisticated use cases; and next-generation stablecoin and yield strategies, featuring cleaner design and stronger risk controls.
She also expects central bank digital currencies (CBDCs) and institutional-grade real-world asset infrastructure to accelerate as baseline financial rails.
As for Bitcoin's long-term trajectory, Liu isn't worried about existential risks—including quantum threats—and believes developers will adapt as needed. The next five years, she says, still look constructive for Bitcoin's evolution.