Bitcoin is headed for a fresh price record this year. The catch? Three things need to line up first.

Matt Hougan, chief investment officer at Bitwise, explained that one already has a greenlight while the other two are yellow.

“We’ll go substantially higher” if those three conditions are met, Hougan told DL News.

What are the three factors? The avoiding another October 10-like flash crash, passage of the Clarity Act, and lastly, reasonable performance from the broader stock market.

Hougan’s thesis comes just as Bitcoin surged 5% this week to about $96,000.

October 10 is over

First, the good.

The October 10 flash crash that wiped out $1.4 trillion from crypto markets and exposed systemic fragility from overleveraged positions has blown over, Hougan said.

When leveraged positions unwind violently, they create contagion across crypto markets, and Bitcoin usually takes some time to reset from major deleveraging events to rebuild momentum.

That time is now over, Hougan argued.

“We have a greenlight there,” he said.

Clarity Act passage

The second catalyst would be the passage of the Clarity Act, Hougan said.

The bill, scheduled for a Senate Banking Committee vote on Thursday, would resolve whether the Securities and Exchange Commission, or Commodity Futures Trading Commission regulates crypto markets.

Under the Senate version, the SEC would regulate “ancillary assets” — tokens whose value relies on issuer efforts. The CFTC would regulate digital commodities like Bitcoin.

The bill also bans stablecoin issuers from paying passive yield, a victory for banks. Crypto companies, however, could offer rewards on activities like transactions and providing DeFi liquidity.

Crucially, the bill protects creators of non-custodial software from prosecution under money-transmitting laws — addressing cases like Tornado Cash co-founder Roman Storm’s conviction.

But the bill also grants Treasury sweeping surveillance powers. Galaxy research head Alex Thorn warns it marks “the most significant expansion of government financial surveillance power since the 2001 USA Patriot Act.”

The bill would let the Treasury freeze crypto transactions for up to 30 days without a court order and designate protocols or jurisdictions as money-laundering concerns.

Hougan assigns the Clarity Act passage a “yellow light.”

Risk-on environment

Finally, the stock market needs to perform reasonably well for Bitcoin to continue its upward momentum.

In the past few years, Bitcoin has increasingly traded in tandem with risk assets. When equities sell off, Bitcoin typically follows, likewise when they rally.

Hougan said the broader market needs a “slightly positive uptrending channel” for Bitcoin to break to new highs.

He also assigned it a yellow light.

To be sure, there’s one big caveat: supply overhang at $100,000.

“There’s still Bitcoin for sale at $100,000,” said Hougan, referring to large holders — also known as whales — wanting to exit around that psychological level.

This selling pressure could limit Bitcoin’s upside for most of 2026.

In fact, Hougan said that he’s “not sure how much sell pressure is left” but expects it to “stick around for the majority of the year.”

Pedro Solimano is DL News’ markets correspondent. Got a tip? Email him atpsolimano@dlnews.com.