Bitcoin (BTC) is set to gain from new macro tailwinds as US macro data sets up a “reflation” trade.
Key points:
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US ISM PMI data for January breaks a full year of contraction during 2025.
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Reactions disagree over the impact on BTC price action despite the previous PMI correlation.
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A hidden bearish divergence between PMI and BTC/USD is now active.
PMI feeds case for BTC price “final bull”
New analysis from sources including Andre Dragosch, European head of research at crypto asset manager Bitwise, sees US financial policy fueling a BTC price rebound.
This week, the latest Manufacturing Purchasing Managers Index (PMI) Report from the Institute of Supply Management (ISM) delivered a surprise overshoot.
ISM PMI is a composite gauge for US economic performance, and contracted throughout 2025. Now, the index has pushed back above the key 50 level for the first time since mid-2022, data from TradingView confirms.
For Dragosch, this, coming as a consequence of the wild rally in gold and silver, means one thing: “reflation.”
“You’re naive if you believe that there is no valuable information for bitcoin in the latest (precious-)metals rally,” he told X followers in a post on Tuesday.
Dragosch argued that the ISM spike was thus “no surprise.”
“Such macro environments have always been associated with bitcoin bulls runs in the past,” he added.
Crypto trader, analyst and entrepreneur Michaël van de Poppe went further, stressing the correlation between PMI and BTC price strength in recent years as part of a broader risk-on cycle.
“The ISM Manufacturing PMI is heading into the first 50+ read in more than 3 years. It’s been one of the longest ‘bear’ markets on that regard. Not great for the business cycle, and not great for Bitcoin,” he wrote on X.
“The fact that Bitcoin rallied is simply and only due to the launch and liquidity of the ETF. By now, just now, is the moment that the markets start to wake up.”
Van de Poppe acknowledged major changes in economic conditions over Bitcoin’s previous price cycles, adding that the current setup required “perspective.”
“In the coming 1-3 years, we’ll see a strong, and final bull on Bitcoin and Crypto,” he forecast.
Bitcoin vs. PMI: “Probably different outcome”
Reflation refers to deliberate policy measures designed to stimulate economic activity without sparking price increases — inflationary forces.
Related: Bitcoin bull market ‘over’? BTC price sees 4th red monthly candle
The US is currently in a tenuous position with regard to inflation after the latest data releases painted a mixed picture over trajectory.
As Cointelegraph reported, concerns remain that inflation may reemerge as 2026 goes on.
PMI on its own was therefore not enough to convince everyone that Bitcoin would see relief this year.
“Cherry-picking a single macroeconomic indicator and treating it as the cycle is, in economics, called proxy abuse,” trader Titan of Crypto commented on the back of the data.
Titan of Crypto directly compared PMI data to BTC price action, and highlighted a key difference this time around.
“In 2013, 2016 and 2020, when PMI moved back above 50, Bitcoin showed a hidden bullish divergence. Each time, a bull run followed. Today? PMI just crossed above 50 again but this time we have a regular bearish divergence instead,” he concluded.
“Same indicator, different structure, probably different outcome.”
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