The midterm elections, which will take place in the United States in the last quarter of 2026, are on their way to becoming a critical turning point for the cryptocurrency market and global financial circles. The macro thesis put forward by market expert “Egrag Crypto” predicts that expectations of changes in liquidity conditions will trigger digital asset prices before political developments. In this period where economic restrictions and political pressures intersect, investors are focused on the new wave of recovery that will be created by possible easings in the Fed’s monetary policy.
Market Structure and Liquidity Expectations
Market analysts draw a framework where market structure and liquidity flows determine political outcomes, rather than election results shaping markets. The projection in question covers a scenario in which a large-scale market correction will occur in the first months of 2026 and criticism of Federal Reserve (Fed) Chairman Jerome Powell will peak in this process. The dissatisfaction caused by the economic contraction is expected to lead to a forced change of course in monetary policy towards the middle of the year.
As the election atmosphere enters, the increased pressure on policy makers may lead to the promotion of market-friendly conditions. Loosening interest rates or reopening liquidity taps paves the way for financial markets to enter a strong recovery phase in the second half of 2026. In this cycle, factors such as rising asset prices, tax facilities for small businesses and dividend income have the potential to rapidly improve the public’s perception of general prosperity.
The macro cycle in question is based on the idea that market dynamics drive politics, not politics. Renewing investor confidence and filling wallets creates a “noticeable economic relief” that directly affects voters’ preferences. This situation contributes to the creation of an environment where political actors can use economic data to their advantage.
Return from the Excitement of 2024 to the Reality of 2026
The cryptocurrency market witnessed a massive rally in 2024, when Bitcoin reached record levels following Donald Trump’s election victory. At the time, optimism that pro-crypto laws would be passed and the expectation that regulatory pressures would ease led to a massive influx of capital into the industry. However, by 2026, it seems that the excitement created by the political winds of that period has been replaced by macroeconomic realities.
With the Bitcoin price falling to the $60,000 range, the wave of enthusiasm remaining from 2024 was replaced by a cautious expectation. The Federal Reserve’s tight monetary policies and the uncertainties in the global economy are again questioning the position of digital assets among the “safe haven” or “risk appetite”. It has been understood through bitter experience that in order for the post-election rises of the past to be permanent, not only political promises but also a sustainable monetary policy basis must be formed.
Ahead of the next midterm elections, the cryptocurrency world is focusing not only on the crypto-friendly rhetoric of the candidates, but also on the Fed’s interest rate decisions and dollar liquidity in the market. The thesis that the improvement in the financial structure will not follow political success, on the contrary, abundance of liquidity will create a political success story is at the center of 2026 strategies. Therefore, the most important data set to watch in the coming months will be changes in central banks’ balance sheets rather than political headlines from Washington.
