The surprising rise in the key factory index has traders reconsidering risks and has cryptocurrency experts debating whether Bitcoin will ride a new rally or remain in a downward slide.
The ISM Manufacturing PMI rose into expansion territory in January and the single data point has garnered a lot of praise from market strategists and cryptocurrency analysts alike.
ISM Manufacturing Signal Changes
The January PMI hit 52.6, according to the Institute for Supply Management. Those numbers cross the line that separates contraction from growth.
For investors watching the signals closely, such a move could mean money is starting to flow back into assets considered higher risk.
“The past breakouts in 2013, 2016, and 2020 served as key catalysts for major bull markets in Bitcoin,” said Joe Burnett, Vice President of Bitcoin Strategy at Strive.
The Fed will notice this. Strong manufacturing print changes the debate on inflation and interest rate policy. Traders are pricing in the possibility of policy tightening when growth appears robust.
At the same time, some economists point out that manufacturing is only one piece of the puzzle. Services, employment and consumer demand are also important. According to the report, the index reading was the highest since August 2022, which is noteworthy in itself.
One of the longest ISM manufacturing PMI contractions in U.S. history ended this morning at 52.6, up 4.7 points from December.
Past breakouts in 2013, 2016, and 2020 served as key catalysts for major bull markets in Bitcoin.
This ends 26 consecutive months…
— Joe Burnett, Msba (@IicaPital) February 2, 2026
Bitcoin price movement and market mood
Bitcoin price has been choppy. It hit a high above $125,000 at the end of last year, then plummeted before rebounding to the $78,000 area. According to the report, the decline was due to large-scale liquidation events and a series of macro shocks that drove investors toward safe assets.
Some buyers are using the decline as an entry point. Others remain on the sidelines. The correlation with stock technology names has been strong, meaning Bitcoin has behaved more like a risk asset than digital gold in recent months.
Source: ISM
Some traders argue that rising PMI numbers often precede “danger” periods when speculative betting occurs again. But this link is not ironclad. Bitcoin’s movements are shaped by liquidity flows, ETF inflows and outflows, geopolitical explosions, and cryptocurrency-related events. The market is being pushed from multiple directions at the same time.
Who will believe in predictions?
Institutional voices dispersed. Estimates range from cautious to very optimistic, according to reports from various companies. One firm predicts a post-crash rally that could push prices well above current levels by the end of the year.
Another research firm warns that there will be more retracements before a sustained uptrend emerges. Officials at one large institution declined to pin down any numbers at all, saying the environment was too chaotic to make confident predictions.
This kind of range tells a clear story: the uncertainty rule. Analysts who tie Bitcoin to macro cycles are gaining followers, while those who treat Bitcoin as an independent asset argue for a different playbook.
Why This Matters
Short-term traders will closely watch economic indicators and liquidity data. Long-term holders will evaluate Bitcoin’s role compared to gold and stocks. According to the report, market structure – who is buying, who is selling and where ETF flows are seen – will likely be as important as any single economic announcement.
ISM’s rise may be the start of a healthier risk atmosphere in global markets, but it does not in itself guarantee a steady rise for Bitcoin. That said, risk is back on the table, and the way forward will likely depend on how policymakers, large investors and retail traders react in the coming weeks.
Featured image from Unsplash, chart from TradingView
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