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- Galaxy Research argues that the Bitcoin bottom came in June and the market has moved into accumulation.
- The Bitcoin price holds just above its 50-week moving average after last week’s crypto sell-off.
- The June low never pushed Bitcoin below the average on-chain cost basis of its holders.
- Hedge funds unwinding futures trades drove most of the institutional selling.
Bitcoin slipped back below $80,000 on Monday, trading around $79,670 after a broad sell-off across crypto markets last week. That leaves the price barely 1.3% above its 50-week exponential moving average just as Galaxy Research argues the bear market is already over. In a report titled “Why Now Is the Time to Add and Hold BTC,” published on October 22, Alex Thorn, Head of Firmwide Research at Galaxy Digital, places the Bitcoin bottom on June 30. The indicator Bitcoin is now retesting sits at the center of that thesis.
The longest stay below the 50-week line
Bitcoin lost its 50-week moving average in the week ending November 16, 2025, and stayed below it for 44 weeks. It reclaimed the indicator in the week ending September 20, 2026, and had logged five consecutive weekly closes above it by October 18. Galaxy reviewed 13 completed reclaims since 2011 and found that duration mattered. In the four cases that followed more than 20 weeks below the average, Bitcoin never closed a week more than 8.4% under the reclaim level over the next year, and one-year gains ranged from 55% to 1,497%. Seven of the nine reclaims that came after 14 weeks or less fell more than 25% within a year. Galaxy also points to the 200-week moving average as the floor of the cycle, noting that Bitcoin’s worst weekly close in June, $59,517 in the week ending June 28, came 4.7% below that line and was recovered the following week.
Four cases make a thin sample, and Galaxy itself frames the conclusion as an investment thesis that can still fail. The on-chain data adds weight to it. The MVRV ratio compares Bitcoin’s market value with the price at which each coin last moved on the blockchain, and a reading below 1.0 means the average holder is under water. At previous cycle bottoms the ratio fell to between 0.56 and 0.75. In June it bottomed at 1.10, so the average holder stayed in profit throughout the sell-off, which never happened in any earlier bear market in Galaxy’s comparison.
Bitcoin stalls under Fibonacci resistance
The rebound from the $57,825 low carried Bitcoin briefly above $83,944 in early October, but buyers could not hold the level for more than a week. That level is the 38.2% Fibonacci retracement of the fall from the $126,200 record in October 2025, which means the point where Bitcoin would have won back 38.2% of everything it lost. Sellers took it back quickly, and three red weekly candles have followed. With price at $79,672 and the 50-week EMA at $78,630, the market is now testing the same average Galaxy treats as the dividing line between recovery and relapse.
Galaxy’s $76,540 reference is a simple 50-week average, which weights every week equally and trails further behind price, while the exponential version on this chart gives more weight to recent weeks and sits higher. The zone between roughly $76,500 and $78,600 is therefore where the test will actually play out. Below it, the 23.6% retracement at $73,962 lies close to the $74,811 average purchase price of short-term holders calculated by Galaxy, so a drop there would put recent buyers back at breakeven, the point where they usually either defend their positions or sell.
The weekly RSI stands at 54, flat on its signal line after peaking near 65 in early October. A reading above 50 means buyers still hold a slight edge over the past 14 weeks, though momentum has cooled to neutral. Volume on the three down weeks has stayed well below the August breakout week, which suggests buyers stepped back while sellers never turned aggressive.
A dying futures trade emptied hedge fund books
Much of the institutional selling came from a single trade. Hedge funds bought spot Bitcoin ETFs and shorted CME futures at the same time, pocketing the premium futures carried over spot. That premium, known as the basis, fell from an average annualized 7.9% around the peak to 4.8% in the 30 days to October 21, and the trade lost its appeal. CFTC data analysed by Galaxy shows asset managers’ net long futures dropping from 43,300 BTC to 18,400 BTC, while leveraged funds cut net shorts from 71,400 BTC to 30,600 BTC.
Nine firms, among them Millennium Management, Brevan Howard, Goldman Sachs and Tudor Investment Corp., reduced reported ETF positions by about 68,000 BTC between September 2025 and June 2026. Across all 2,200 or so reporting institutions, the net reduction came to just 48,000 BTC, so the remaining filers added around 20,000 BTC, with Morgan Stanley’s wealth unit and Mubadala among the buyers. Spot ETF holdings fell only 11% while the price dropped as much as 53%, and the funds have added roughly 87,000 BTC since the June low.
Galaxy’s own exit signal sits at $76,540
Galaxy names its own invalidation points: a weekly close below the 50-week average around $76,540 without a recovery inside a month, or ETF holdings falling below the July 13 trough of 1.22 million BTC. The macro data Galaxy cites can be read in two directions, since U.S. federal debt reached $40.44 trillion on October 20 and annualized interest payments run at $1.28 trillion, which Galaxy reads as support for scarce assets, yet a 10-year Treasury yield of 5.31% also raises the cost of holding an asset that pays no income.
For traders, the next two or three weekly closes will decide which of these levels matters. A bounce from the EMA and a close above $83,944 would reopen the path toward $92,012, while acceptance below $76,500 would put the $73,962 area and Galaxy’s thesis itself under pressure.
Thorn argues that a return to the $125,000 region remains plausible, about 54% above the report’s $81,391 reference price, and points out that the S&P 500 sat only 0.8% below its record on October 22 while Bitcoin was 35% off its peak. Both Galaxy and Thorn disclose Bitcoin holdings. The near-term flow data is also less supportive than the long-term picture, as U.S. spot Bitcoin ETFs turned net negative for October after a three-day run of roughly $1 billion in inflows.
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