Journalist
Posted:
To understand what lies ahead, it is crucial to first look back.
The fourth quarter has revised market expectations upwards. What should be a “seasonal tailwind” for Bitcoin [BTC] It ended up being the weakest quarter of 2025, with BTC falling 23%, wiping out over 60% of the gains from the second and third quarters.
The result? Optimism shook, leveraged traders went red, support levels cracked and fear rose. Notably, even with BTC still about 30% below its early October $126k peak, there isn’t much of a broad “dip buying” yet.
Source: TradingView (BTC/USDT)
In short, the market has shifted from optimism to caution.
And yet Tom Lee’s BTC call did not materialize. In a recent one interviewhe predicted a new all-time high for BTC before the first month of 2026. That begs the big question: what “exactly” is in store for the crypto market?
Looking at recent macro data, his call does not come completely out of the blue.
Given this context, Bitcoin could finally achieve its goal historical trend in the first quarter this time, with an average ROI of 50% in the quarter and historically the asset’s second most bullish period?
US inflation is at multi-year lows
In addition to the charts, the fourth quarter also surprised on a macro level.
Even after successive Fed rate cuts, Bitcoin barely budged. The federal shutdown clearly kept investors cautious Open interest under control. In short, traders did not chase greed, and sentiment remained subdued.
But now, with the shutdown over, The November CPI report is central again. Notably, core inflation fell to 2.6%, the lowest level since April 2021, while the headline CPI stood at 2.7%, versus the expected 3.1%.
Source: TradingEconomics
On the technical side, this brings US inflation close to the Fed’s 2% target.
It is striking that the market already is respond: BTC rose 2.93% intraday, clearly shrugging off the BOJ rate hike. Driving this “break”, Ark Invest quickly moved into crypto stocks, signaling renewed institutional interest.
Overall, the report on cooling inflation has given the market new impetus. Will it hold up? Now that the 23% of the fourth quarter is behind us and most of the FUD has been resolved, it appears that Bitcoin could form a solid foundation to repeat its typical bullish streak in the first quarter.
Final thoughts
- Bitcoin’s Q4 shakeout sets the stage for early 2026, with BTC down 23%, cautious market sentiment, and a potential foundation for a strong first-quarter rally.
- The cooling of US inflation, which is now close to the Fed’s 2% target, is already driving market moves, pointing to upside potential in early 2026.