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The US ISM Manufacturing Purchasing Managers Index (PMI) reached 52.6 in January 2026, breaking above the critical 50 level for the first time in a year.
The January reading marks a shift from contraction to expansion. Investors and analysts are now exploring links between manufacturing PMI trends and Bitcoin price cycles.
US PMI Breaks Expansion Threshold After Year-Long Slump
The US ISM Manufacturing PMI is a closely watched economic gauge that offers an early snapshot of the health of the US manufacturing sector. The index is released by the Institute for Supply Management (ISM).
It is based on surveys of purchasing managers across the country. These executives report on changes in new orders, production levels, employment, supplier deliveries, and inventories, providing real-time insight into factory activity.
The PMI is measured on a scale from 0 to 100. A reading above 50 signals expansion in manufacturing activity, while a figure below 50 points to contraction.
In January 2026, the ISM Manufacturing PMI beat forecasts, rising to 52.6 from 47.9 in December 2025. This marked the strongest reading since August 2022 and signaled a return to expansion after nearly a year of contraction.
It was also the first time the index moved above the 50 threshold since January 2025. The 4.6-point jump represents a notable turnaround in sentiment within the manufacturing sector.
What Does Manufacturing PMI Expansion Mean for Bitcoin?
The latest rebound in the US Manufacturing PMI has fueled optimism across the crypto community. The key question is: why? Analysts suggest that periods of PMI expansion have often coincided with major Bitcoin rallies.
One of the longest ISM Manufacturing PMI contraction periods in U.S. history ended this morning with a breakout to 52.6, up 4.7 points from December.
— Joe Burnett, MSBA (@IIICapital) February 2, 2026
Past breakouts in 2013, 2016, and 2020 served as key catalysts for Bitcoin's major bull runs.
This ends 26 consecutive months of…
Crypto trader Michaël van de Poppe echoed a similar view, pointing out that previous Bitcoin and crypto bull markets tended to unfold when the PMI remained above the 50 level.
With the index now back in expansion territory, he suggested that macro conditions could once again support sustained upside momentum across the digital asset market.
“The previous bull markets on Bitcoin and Crypto happened when it was above 50. We came from the longest period <50 without a recession. It’s time for Bitcoin to shine. We’re a lot closer to the end of the bear market,” he wrote.
Crypto analyst TheRealPlanC also argued that Bitcoin should be analyzed through a broader macroeconomic and business-cycle framework, rather than relying solely on the traditional four-year halving narrative.
“If you don’t upgrade your understanding of the Bitcoin cycle from the 4-year halving mirage mindset to a business cycle / macro mindset fast… You will miss the boat completely on the second massive leg of this Bitcoin bull market!” the post read.
Manufacturing PMI: Monetary Policy Indicator, Not a Direct Bitcoin Catalyst
Some analysts caution that the PMI surge is not a direct driver of Bitcoin price action. Brett argued that the index mainly signals future monetary policy changes. Understanding this difference is key to expectations around the crypto market.
“ISM is not a 1:1 indicator for Bitcoin. It’s a better indicator of future Fed policy,” he said.
Brett noted that while the reading is broadly bullish for the economy, it carries an important caveat for markets. A stronger ISM typically reduces the urgency for the Federal Reserve to cut interest rates.
Historically, periods in which the ISM remains in expansion territory have seen the Fed more inclined to pause or even hike rates rather than pivot toward easing. Higher interest rates are generally unfavorable for crypto markets. Tighter financial conditions tend to reduce liquidity and dampen risk appetite for assets like Bitcoin.
The analyst also pointed to several historical divergences between Bitcoin and the index. In 2014 to 2015 and again in 2018 to 2019, ISM readings ranged from 52 to 59, yet Bitcoin entered extended bear markets.
Conversely, from 2023 to 2025, the ISM stayed below 50 for roughly two years while Bitcoin surged by around 700%.
Nice to see some other guys on this platform that actually post thoughtful takes on macro and how it relates to crypto.
— Benjamin Cowen (@intocryptoverse) February 3, 2026
So many just take everything to mean "alt season is around the corner."
Only a few people actually have well thought out takes on the market. https://t.co/TLYc8rEAUX
With the outlook split, the coming months will be key in determining whether the improvement in US manufacturing activity translates into a sustained Bitcoin recovery or remains a macro signal with limited impact on crypto prices.
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