ISM Manufacturing PMI Index reaches its highest level in 40 months: Analysts believe BTC could benefit

An important indicator reflecting the “health” of the US economy has just recorded its highest monthly level since August 2022. Cryptocurrency analysts believe this signal could signal a potential reversal for Bitcoin, which is currently trading around $78,000.

According to the report released on Monday by the Institute for Supply Management (ISM), the Manufacturing PMI (ISM Manufacturing PMI) reached 52.6 in January — significantly exceeding the market consensus forecast of around 48.5 — and ending a 26-month streak indicating economic contraction.

ISM Manufacturing Purchasing Managers’ Index (PMI) from January 2016 | Source: Trading Economics PMI is a measure closely monitored by investors and the Federal Reserve to assess growth strength, inflation risks, and to guide monetary policy tightening or easing. By convention, a PMI above 50 indicates expansion in the manufacturing sector, while below 50 signals contraction. The last time PMI exceeded 52.6 was in August 2022.

Some Bitcoin analysts interpret the positive PMI results as a potential sign of recovery after Bitcoin dropped to its 10-month low of $75,442 on Monday. Historical data shows that from mid-2020 to 2023, the trend of the manufacturing index has a significant correlation with Bitcoin price fluctuations.

Joe Burnett, Vice President of Bitcoin Strategy at Strive, said: “Historically, PMI reversals often mark a shift to risk-on sentiment,” emphasizing that Bitcoin experienced strong gains following manufacturing output improvements in 2013, 2016, and 2020.

Anonymous analyst Plan C also commented that investors need to shift their perspective on Bitcoin cycles from the “4-year halving model” to a business cycle and macroeconomic approach, or risk missing the “second major rally” of the bull market.

However, Benjamin Cowen — founder and CEO of Into The Cryptoverse — noted that Bitcoin does not always move in sync with PMI, emphasizing that: “Bitcoin is not the economy.” In fact, last year, the ISM manufacturing PMI declined or remained flat for several months, while Bitcoin continued to rise and reached a peak of $126,080.

Price predictions for BTC vary widely

Bitcoin has experienced significant volatility in recent months, especially after the liquidation event on October 10, when over $19 billion worth of leveraged crypto positions were liquidated en masse from the market.

At the current price, Bitcoin is about 38% below its October peak. Meanwhile, precious metals and the stock market generally moved upward, contributing to a more cautious sentiment toward Bitcoin.

Regarding the outlook for 2026, different organizations have very different forecasts. Cryptocurrency venture fund Dragonfly predicts Bitcoin could trade above $150,000 by the end of the year. In contrast, Tom Lee — Chief Research Officer at Fundstrat — believes Bitcoin may still undergo a correction before a strong recovery in the late stage and reaching new highs.

Meanwhile, Galaxy Digital declined to provide a specific forecast, stating that 2026 will be “too chaotic” to predict, and that Bitcoin could fluctuate within a very wide range — from $50,000 to $250,000.

Mr. Giáo