Bitcoin's performance is significantly influenced by both cyclical and structural elements, with structural factors tied to adoption and cyclical factors linked to macroeconomic and on-chain dynamics. Approximately 90% of Bitcoin's performance can be attributed to macroeconomic factors such as growth expectations and monetary policy, while the remaining influence is due to idiosyncratic, on-chain factors.
The Institute for Supply Management (ISM) index is not a leading indicator for Bitcoin but rather coincides with its price movements. Bitcoin can diverge from ISM growth expectations in environments where monetary policy dominates, potentially performing inversely to growth expectations. Additionally, in non-macro regimes, on-chain factors, such as long-term holder selling, can significantly impact Bitcoin's performance, as observed in Q4 2025. This highlights the dynamic nature of market regimes, which are constantly evolving.
Bitcoin Performance Influenced by Macro and On-Chain Factors
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