Top Reasons a Major Crypto Market Rally Could Arrive Soon

A crypto market rally may be around the corner. Major macro events are aligning. These events likely explain the steady prices of Bitcoin and top altcoins this week.

The market is holding firm. Jitters in the artificial intelligence industry continue. This article explores some of the major factors that may trigger a crypto bull run in the coming months.

M2 Growth Strengthens the Crypto Market Rally Outlook

One of the main reasons why the crypto market rally may happen soon is that the Federal Reserve is supportive. The bank slashed interest rates by 0.25% this week, bringing the year-to-date cuts to 75 basis points.

The Fed guided for one interest rate cut in 2026. Market participants reacted with disappointment. The bank also announced the start of its quantitative easing policy. Short‑term bonds will be part of the purchases. The program will total $40 billion a month.

Most importantly, economists don’t believe that the bank will deliver just one cut in 2026, a Polymarket poll pricing in three. One of the reasons for this is that Donald Trump will replace Jerome Powell, possibly with Kevin Hassett. Hassett is expected to open to more cuts.

The monetary policy easing will come at a crucial time. The US M2 money supply has jumped to a record high of over $22.9 trillion.

Historically, there has been a close correlation between crypto prices and the M2 figure. As the chart below shows, the global M2 normally leads Bitcoin by between 3 and 5 months

China to Cut Rates and Deliver More Stimulus

Meanwhile, in China, the government and central bank have committed to easy money policies as the economy slows.

A report published after the Central Economic Work Conference outlined the plan. Policymakers will flexibly and efficiently use interest rates and reserve requirements. They aim to ensure substantial liquidity.

That language suggested that policymakers are considering cutting rates. The rates are already low. They want to boost manufacturing and consumption this year.

A supportive monetary and fiscal policy in China would be bullish for the crypto market. It is the second-biggest economy in the world.

Also, China has banned Bitcoin and other cryptocurrencies. However, data shows that it is still one of the most active countries in the industry.

Crypto Fear and Greed Index is Rising Gradually

Meanwhile, the Crypto Fear and Greed Index has started crawling back in the past few days. It’s a move that often precedes a crypto market rally.

The index tumbled to a record low in November as the crypto market crashed. It has now started going up and is currently at 29. This means that it may exit the fear zone and move to the neutral zone soon.

Such a move could shift the market mood. The potential entry into the greed zone will spark a risk‑on sentiment in the crypto industry. This change will push Bitcoin and other tokens higher.

Historically, crypto prices do well when the index is rising and then reverse when it moves to the extreme greed area.

Falling Dollar and Global Policy Shifts Support a Crypto Market Rebound

The other potential catalyst for the crypto market is the US dollar. Analysts expect it will resume its downtrend in the next few months.

A Bloomberg report cited companies like Deutsche Bank and Goldman Sachs. These firms expect the greenback to drop in 2026. They see a potential divergence between the Fed and other central banks as the cause.

The Fed will likely maintain a dovish tone in 2026 as other major central banks hike rates. A good example of this is the Bank of Japan, which is expected to hike as soon as this month.

The European Central Bank (ECB) is also expected to hike rates in October next year. A weaker dollar normally leads to demand for risky assets like cryptocurrencies.

Separately, there is a likelihood that the ongoing deleveraging will end soon. It’s a move that will push more investors back to the crypto industry.