While research from Galaxy Digital suggests Bitcoin may be transitioning into an accumulation phase, potentially marking the end of its bear market, the interpretation of current on-chain data and price action remains subject to significant uncertainty. The firm’s analysis indicates that the current period could be favorable for buying and holding the asset, yet the broader market landscape presents a complex and ambiguous outlook.
Evidence for a Potential Accumulation Phase
According to Galaxy Digital research, the conclusion that Bitcoin’s bear market has ended and an accumulation phase has begun is based on a confluence of technical indicators, halving cycle analysis, on-chain data, selling pressure trends, and macroeconomic factors. Alex Thorn, Galaxy’s head of firmwide research, argued in a report published Monday that the asset is now in a favorable period for buying. This perspective is supported by several key observations.
Technically, Bitcoin has shown resilience, spending five consecutive weeks above its 50-week moving average as of the week ended October 18. This follows a period of 44 weeks below this key indicator. Historically, since 2011, Bitcoin has reclaimed its 50-week average after extended periods below it four times. In these past instances, the price typically did not fall more than 8.4% below the reclaim level in the subsequent year and eventually recovered to prior all-time highs. The current 50-week moving average stands at approximately $76,540. However, this metric does not suggest price direction.
The halving cycle, a roughly four-year event that reduces the supply of new Bitcoin, also aligns with historical patterns suggesting a potential bottoming phase. Thursday marked day 916 of the current cycle, falling within the historical range of 777 to 912 days after previous halvings when bottoms were observed. Furthermore, the most recent Bitcoin downturn represented a 53% drop, which is notably shallower than the 77% to 93% declines seen in past bear markets, potentially indicating underlying strength.
On-chain data also provides supporting evidence for a shift. For the first time in any recorded bear market, Bitcoin’s market value has not fallen below its realized value, which represents the average price at which every coin last moved. The ratio between these two metrics bottomed at 1.10 in the current cycle, compared to lows of 0.56, 0.69, and 0.75 in prior cycles. Additionally, the spent-output profit ratio, which tracks whether coins are being sold at a profit, is currently at 1.009, suggesting limited selling pressure from holders.
Selling pressure appears to be diminishing. Long-dormant coins, those unmoved for five years or more, have seen approximately 34,000 BTC sold per month this year, which is half the pace observed in 2024. U.S. spot Bitcoin ETFs have also added around 87,000 BTC since the June low, despite a peak-to-trough holdings decrease of only 11% while the price dropped 53%.
Uncertainties and Countervailing Factors
However, significant uncertainties persist. The macroeconomic landscape presents a mixed picture. Federal debt has reached $40.44 trillion, with a projected deficit of $1.99 trillion for fiscal year 2026. The 10-year Treasury yield hit 5.31% this month, its highest level since 2007. While these factors might support hard assets like Bitcoin as an alternative to fiat, the S&P 500 is trading near record highs, and Bitcoin would need a 53% increase to reclaim its previous all-time high. The report found that a bet against stocks and hard assets is a bet on fiat, a position considered unfavorable in the current environment.
Market volatility is also evident. Spot Bitcoin ETFs experienced a $1 billion three-day inflow streak followed by two days of significant outflows this week, resulting in negative flows for October. Hotter-than-expected inflation data last week revived bets on further Federal Reserve rate hikes, which could increase borrowing costs and strengthen the dollar, potentially acting as headwinds for Bitcoin.
Galaxy Digital’s identified tripwire for a bearish reversal is a weekly close below Bitcoin’s 50-week moving average of $76,540 that is not regained within a month. While Thorn noted that Bitcoin has demonstrated an ability to reach at least $125,000 and sees no reason why it cannot retake that level, this remains a projection. Both Galaxy and Thorn disclose holdings in Bitcoin.
Conclusion: A Balanced Perspective
In conclusion, while Galaxy Digital research presents several indicators suggesting Bitcoin may be entering an accumulation phase, definitive pronouncements about the end of the bear market are premature. The market remains subject to considerable uncertainty, influenced by evolving macroeconomic conditions, regulatory developments, and investor sentiment. A balanced perspective, acknowledging both the supportive signals and the prevailing risks, is essential for navigating the current Bitcoin landscape.
Why This Matters
The materials describe a narrow update: Galaxy Digital’s head of research, Alex Thorn, published a report arguing that Bitcoin’s bear market concluded in June and that the current period is favorable for accumulation and buying. Whether Bitcoin may regain its prior all-time high remains uncertain.
Broader Context
Source materials place the market analysis in this context: Galaxy Digital’s head of research thinks the worst is over for Bitcoin, but this outlook is subject to significant market uncertainties.
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