U.S. Manufacturing Activity Hits Two-Year Peak – Could Bitcoin Rally Next?

By Emir Abyazov

Key highlights:

  • The U.S. Manufacturing PMI rose to 52.6 in January, ending 26 months of contraction and beating expectations.
  • Analysts are divided on whether improving economic data supports or challenges Bitcoin’s next rally.
  • Institutional forecasts for 2026 range widely, reflecting deep uncertainty about crypto’s macro outlook.

The U.S. Manufacturing Purchasing Managers’ Index (PMI) has climbed to 52.6, its highest level since August 2022, ending 26 consecutive months of contraction in factory activity. The unexpected rebound has reignited debate among crypto analysts over whether improving macroeconomic conditions could signal a new phase for Bitcoin.

The Institute for Supply Management reported that January’s reading not only moved decisively above the 50 threshold that separates contraction from expansion, but also exceeded forecasts of 48.5. For traditional markets, the data points to renewed economic momentum. For Bitcoin, the implications are more complex.

What the PMI rebound could mean for Bitcoin

The PMI is widely viewed as a barometer of economic health. A reading above 50 indicates expansion, while anything below signals contraction. Because the index often precedes shifts in Federal Reserve policy, investors closely monitor it for clues about liquidity conditions and interest rates.

Bitcoin is currently trading around $78,900 after briefly touching a 10-month low of $74,532. Some analysts argue that turning points in manufacturing activity have historically aligned with renewed risk appetite.

Strive’s Vice President of Bitcoin Strategy, Joe Burnett, noted that previous PMI reversals in 2013, 2016, and 2020 coincided with strong Bitcoin rallies. In his view, improving economic data can signal broader market confidence, which tends to benefit risk assets.

An analyst known as Plan C went further, arguing that Bitcoin cycles should be understood through the lens of broader business cycles rather than relying solely on four-year halving patterns.

Not everyone sees a direct link

Skeptics caution against drawing straight lines between factory data and crypto prices. 

Benjamin Cowen, founder of Into The Cryptoverse, emphasized that Bitcoin does not always move in sync with economic indicators. He pointed out that manufacturing data weakened for several months last year while Bitcoin continued climbing toward its peak.

The divergence highlights a persistent debate: Is Bitcoin primarily a risk asset tied to liquidity cycles, or does it increasingly behave as a hedge against structural economic imbalances?

2026 forecasts show wide disagreement

Market volatility has intensified the uncertainty. Following major liquidations in October that wiped out roughly $19 billion in positions, Bitcoin remains significantly below its previous highs.

Institutional forecasts vary sharply. The Dragonfly venture fund predicts Bitcoin could trade above $150,000 by year-end. Fundstrat’s Tom Lee remains optimistic about 2026, expecting recovery followed by stronger gains in subsequent years. 

Meanwhile, Galaxy Digital has declined to provide a precise forecast, arguing that 2026 could prove too unpredictable, with possible outcomes ranging from $50,000 to $250,000.

The stronger PMI reading adds another layer to the puzzle. Historically, manufacturing rebounds have often preceded shifts in monetary policy. A resilient economy could delay rate cuts or even tighten financial conditions, potentially weighing on risk assets. On the other hand, renewed growth can also boost investor confidence and capital flows.

For Bitcoin, the decisive factor may not be the PMI alone, but how it reshapes expectations around liquidity, inflation, and long-term fiscal stability. Whether this marks the start of a new bullish phase or simply another short-term correlation remains an open question.

Source:: U.S. Manufacturing Activity Hits Two-Year Peak – Could Bitcoin Rally Next?

Updated: February 3, 2026 at 1:53 pm
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