Galaxy Research has told clients that Bitcoin’s bear market likely ended with the June 2026 low, arguing that a 44-week recovery above the 50-week moving average, improving spot ETF holdings and a less crowded futures market could support a return toward $125,000. The firm also set a clear technical line for reassessing that view: a weekly close below $76,540 that is not regained within a month.
The call rests heavily on Bitcoin’s behavior around two long-term technical indicators. Galaxy said the June low formed near the 200-week moving average, a level often treated as a broad cycle support line. The weakest weekly close fell only 4.7% below that average, compared with breaches of 1.4% in 2015, 2.8% in 2018 and 32% in 2022.
Bitcoin then closed above its 50-week moving average during the week ending Sept. 20 and remained above it for five consecutive weeks through Oct. 18, according to the note. That recovery followed 44 weeks below the indicator, placing the current setup in a smaller group of past market rebounds that followed prolonged weakness rather than brief corrections.
A longer break below the 50-week average
Galaxy identified 13 instances since 2011 in which Bitcoin crossed from below to above the 50-week moving average. Its analysis split those events according to the length of time Bitcoin had spent under the level.
In four cases where Bitcoin remained below the 50-week average for more than 20 weeks, the price did not close more than 8.4% below the reclaim level during the following year. One year after those recoveries, Bitcoin had gained 1,497%, 128%, 55% and 142%, Galaxy said. Previous all-time highs were revisited between 33 and 83 weeks after the reclaim.
The other nine episodes were less reassuring. When Bitcoin had stayed beneath the moving average for 14 weeks or less, seven cases later produced drawdowns exceeding 25% within a year. Galaxy’s framing places the current recovery closer to the longer-duration group, though historical comparisons alone cannot determine the next move.
The firm also linked the June bottom to Bitcoin’s halving cycle. Prior cycle lows arrived 777, 889 and 912 days after halvings, while the latest low came 802 days after the most recent block-reward reduction. The peak-to-trough decline in this downturn was 53%, compared with declines of 93%, 85%, 84% and 77% in earlier bear markets.
Galaxy said Bitcoin also avoided falling below its network cost basis during the latest selloff, unlike earlier cycles. Its MVRV ratio — which compares Bitcoin’s market value with the aggregate value at which coins last moved on-chain — bottomed at 1.10, versus lows of 0.56, 0.69 and 0.75 in prior cycle troughs. A ratio above 1 indicates that, in aggregate, the market value remained above realized value.
New buyers appear to be holding gains
The report tied the rebound from $58,525 to coins with an average cost basis of $74,811. Bitcoin first moved back above that level on Aug. 19, and those holders were sitting on gains of about 9% by Oct. 22, Galaxy said. The spent output profit ratio, which tracks whether coins moved on-chain are generally being spent at a profit or loss, stood at 1.009.
That narrow margin suggests recent buyers were not facing widespread losses, but neither were they sitting on the large unrealized gains often associated with late-cycle selling pressure.
Galaxy also pointed to a slowing turnover rate among coins that had not moved for at least five years. Average monthly movement in that group fell from 67,000 BTC in 2024 to 47,000 BTC in 2025 and 34,000 BTC per month in 2026, according to the note.
The total remains substantial. From October 2024 onward, about 1.11 million BTC of long-dormant supply changed hands, the largest such distribution across prior cycles in Galaxy’s count. The firm said spot Bitcoin ETFs and Bitcoin-holding digital asset treasury companies absorbed much of that supply.
Spot ETF holdings rose by 87,000 BTC from the June low, while leveraged funds reduced their net short positions in CME Bitcoin futures. Galaxy characterized the combination as more consistent with directional demand than with arbitrage activity.
Futures trade becomes less attractive
CFTC positioning data showed both reduced long exposure among asset managers and a sharp retreat in leveraged-fund shorts. Asset managers’ net long position in CME Bitcoin contracts dropped from 43,300 BTC during the week of Bitcoin’s all-time high to 18,400 BTC, a 57% decline. Leveraged funds’ net short position fell from 74,100 BTC to 30,600 BTC, a 59% reduction.
Total dollar-denominated open interest declined 51%, Galaxy said. The contraction reflects a futures market carrying less leverage and fewer basis trades, where firms seek to capture the spread between futures prices and spot Bitcoin.
Galaxy calculated that the annualized front-month basis averaged 4.8% over the 30 days through Oct. 21, only 0.6 percentage points above the three-month Treasury yield. Before Bitcoin’s all-time high, the basis averaged 7.9%, or 3.9 percentage points above Treasuries.
After ETF fees, futures-roll expenses and clearinghouse margin, the remaining excess return over spot Bitcoin may be about 1.5 percentage points in parts of the curve, Galaxy estimated. That compares with roughly 3 percentage points near the market high. The weaker economics could explain why multi-strategy desks cut positions even as the spot market began to recover.
Thirteen-F filings offered a related picture, although they cover only certain institutional managers. Reporting holders reduced spot ETF exposure from the equivalent of 355,000 BTC at the end of September 2025 to 307,000 BTC by June 2026. Galaxy said nine firms, including Millennium Management, Brevan Howard, Goldman Sachs Group, Capula Management and D. E. Shaw, cut combined exposure by 68,000 BTC.
That exceeded the 48,000 BTC decline across all 2,200 reporting filers, implying that other filers added holdings. Galaxy said wealth-management platforms and sovereign wealth funds absorbed part of the selling.
Fiscal pressures support the macro case
Galaxy’s broader macro argument centers on U.S. borrowing and high interest costs. The firm cited U.S. federal debt of $40.44 trillion as of Oct. 20, up from $23.2 trillion in early 2020. It put the fiscal 2026 deficit at $1.99 trillion, or 6.2% of gross domestic product, while annual interest expense stood at $1.28 trillion.
The 10-year Treasury yield reached 5.31% on Oct. 5, its highest level since 2007, according to the report. Galaxy also cited a Federal Reserve policy range of 3.75% to 4.00% following its Sept. 16 decision, with CPI inflation at 3.7% and M2 money supply growth at 5.7%.
Those conditions do not provide a direct price target for Bitcoin, but they reinforce the appeal of assets that some market participants use to hedge concerns around long-term currency debasement and fiscal expansion.
Galaxy’s bullish framework has limits. Beyond the $76,540 moving-average level, it flagged spot ETF holdings below 1.22 million BTC, a credible and defined route toward cryptographically relevant quantum computing, or U.S. fiscal tightening as developments that would challenge its outlook. Its case for a move back toward $125,000 therefore depends on ETF demand holding up, recent buyers retaining their positions and Bitcoin maintaining its reclaimed long-term support.
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