The US Midterm Elections Could Be a Turning Point for the Crypto Market: Liquidity Expectations Lead, Political Narratives Follow

As the US midterm elections in Q4 2026 approach, the market is beginning to view this political event as a potential macro catalyst.

Most analysts agree that this move will not only trigger a bullish trend in traditional financial markets but also impact the cryptocurrency market, which is currently undergoing a correction.

However, some market analysts believe that what truly drives the market may not be the election results themselves, but rather the liquidity games surrounding the elections.

According to macro insights from analyst “Egrag Crypto,” early signals from the prediction markets show that the Republican prospects are relatively weak, which could prompt the ruling party to create a favorable economic environment before the election window, thereby changing liquidity conditions.

Specifically, the view is that the market may experience a broader correction in early 2026, accompanied by increased criticism of Federal Reserve Chair Jerome Powell;

By mid-year, policymakers might ease liquidity in response to economic and political pressures; and by the second half of the year, the market is expected to enter a recovery phase, coinciding with the US midterm election window.

Overall, Egrag Crypto’s reasoning suggests that during economic downturns, the Federal Reserve tends to become a target; as liquidity improves and markets rebound, political sentiment will also shift.

Therefore, rather than political policies driving market shifts, it is the market structure and liquidity trends shaping political outcomes—meaning the dominant forces are always market structure and liquidity trends, with political power often merely riding the wave.

His prediction is not unfounded but rather a correction and reflection on the current market state. Looking back at 2024, Trump’s victory sparked a crypto market frenzy, with Bitcoin reaching a record high.

However, as post-election euphoria faded and macroeconomic pressures mounted, Bitcoin’s current price has fallen back to around $68,000, indicating that purely political good news cannot sustain the market long-term.

In summary, the liquidity shift in 2026 combined with the influence of the US midterm elections may be the fundamental driver of the next market cycle.

#宏观催化剂 #US Midterm Elections