As we approach 2026, the crypto market is watching one of the most critical questions facing global economies: will deflationary pressures force central banks back into stimulus mode, or can policymakers maintain their current stance?

The Federal Reserve faces a genuine dilemma. On one hand, recent inflation readings suggest progress, but underlying economic momentum remains fragile. If deflation takes hold—think slowing consumer spending, contracting credit cycles, asset price deterioration—the Fed would likely have no choice but to pivot toward another round of rate cuts and liquidity injections.

For crypto traders and long-term HODLers, this matters enormously. Each prior Fed easing cycle has historically fueled risk-on sentiment and strengthened alternative assets like Bitcoin and altcoins. A deflationary scenario triggering fresh stimulus would probably follow the same playbook.

Conversely, if the economy remains resilient and inflation stays sticky, the Fed might hold firm—keeping rates elevated longer than many expect. That's the bearish case for digital assets in the near term.

What's your read? Does 2026 bring another monetary pivot, or do we finally get the "higher for longer" outcome?