Galaxy Research believes that the bear market for Bitcoin has ended in June, and this asset has now entered a phase of accumulation. The company stated in a research note, "We believe that now is an attractive time to buy and hold Bitcoin."

At the time of this report's release, the price of Bitcoin was close to $80,000, which is about 35% lower than its peak in October 2025, but 39% higher than its low point on June 30th. To return to that previous high, the price would need to rise by another 53%. In contrast, the S&P 500 index is just 1% away from the record high it set on October 6th.

The report presents arguments from four aspects: technical analysis, position management, fundamental analysis, and market sentiment.

Bitcoin Technical Analysis

Galaxy uses two weekly moving averages to track the bear market of Bitcoin. The company states that the 200-week moving average acts as a support level in each bear market cycle, while the 50-week moving average serves as resistance above it.

Bitcoin fell below its 50-week moving average in November 2025 and remained below that level for 44 weeks. In June, it tested its 200-week moving average but managed to hold on; the lowest weekly closing price was only 4.7% below that average. Prices then closed back above the 50-week moving average in September, and as of the week of October 18, they had been above that level for five consecutive weeks.

According to Galaxy statistics, there have been 13 instances since 2011 where the price has once again crossed above this moving average, and the outcome depends on how long the price remained below this line. In the previous four cases where the price stayed below the moving average for 20 weeks or longer before crossing back above, the price was higher a year later, with increases ranging from 55% to 1497%, and the closing prices within the following 12 months never fell by more than 8.4% below the level at which it crossed back above. However, in the other 9 cases where the duration below the moving average was shorter, 7 of them saw a decline of more than 25% within one year.

The company also stated that the halving cycle supports the same conclusion. In previous cycles, the lows appeared on the 777th, 889th, and 912nd days after the halving, respectively. October 22nd is the 916th day of the current cycle. Galaxy mentioned that the subsequent increases were 87 times, 19 times, and 7.6 times, respectively, and that each round has been showing a reduction, but they do not predict that this will simply repeat itself.

The report states that the current 53% pullback is the smallest in Bitcoin's history, and it is also the first time that the price has not fallen below the network's realized cost base.

Position

The report suggests that since the peak, basis traders and macro funds have been the main sellers. Galaxy cites data from the Commodity Futures Trading Commission of the United States, stating that net long positions of asset management institutions in CME Bitcoin futures have decreased by 57% compared to the week of the historical high.

The net short positions of leveraged funds also decreased by a similar margin. These positions represent the futures side of cash arbitrage transactions that are hedged against the spot ETF. The annualized average basis in the 30 days before the high point of the previous month was 7.9%, but it dropped to 4.8% in the 30 days before October 21st. Galaxy stated that this was no longer sufficient to cover the transaction costs and risks.

Galaxy also identifies sellers through the 13F position files. Millennium Management, Brevan Howard, Goldman Sachs, Capula, Farallon, D.E., Shaw, Schonfeld, Symmetry, and Tudor reduced their spot ETF holdings by varying amounts ranging from 29% to 100% between the end of the third quarter of 2025 and the end of the sixth quarter of 2026, with a total reduction of 68,000 Bitcoins.

As the total holdings in all 2,200 filing documents decreased by 48,000 Bitcoins, the remaining institutions generally increased their holdings. The wealth management departments of Morgan Stanley, Mubadala, and the Abu Dhabi Investment Council are among those that made purchases.

The report states that spot ETF positions have declined by 11% from their peak to their lowest point, while prices have fallen by 53%; since the low point in June, these funds have added another 87,000 bitcoins.

Fundamentals and Sentiment

The fundamental arguments of Galaxy mainly revolve around the fiscal situation of the United States. The report states that as of October 20, the federal debt of the United States reached 40.44 trillion dollars, with a deficit of 1.99 trillion dollars for the fiscal year 2026. The yield on 10-year U.S. Treasury bonds rose to 5.31% on October 5, the highest level since 2007.

The company believes that, with a deficit maintained at 6%, refinancing this debt at an interest rate of 5% will put inflationary pressure on the government.

The report also mentions lending related to artificial intelligence, which is expected to reach $570 billion this year according to Morgan Stanley. It states that this will exacerbate the aforementioned pressures, rather than forming direct competition with the scramble for capital.

In terms of sentiment, Galaxy compares the current environment to the periods from 2015 to 2016 and from 2018 to 2019. During those times, the mainstream financial industry embraced "blockchain" while ignoring Bitcoin, and both periods coincided with the bottoms of economic cycles. The company states that the landscape in 2026 is characterized by "stablecoins and tokenization, rather than Bitcoin," and mentions pilot programs by banks for tokenized deposits, the failure of a Senate motion to end debates on Clarity Act on September 15th, as well as search volumes for bitcoin on Google being at multi-year lows.

Risks

Galaxy has set a warning line for its judgment: if the weekly closing price of Bitcoin falls below the 50-week moving average of around $76,540 and fails to regain that level within a month, their view will be challenged. The report also mentions AI-driven theft incidents, including the $387.5 million attack on Bitget, but points out that these incidents do not involve the Bitcoin protocol itself.

In the field of quantum computing, the report states that there are 7.1 million Bitcoins located in outputs with exposed public keys, but currently, there are no quantum computers that are cryptologically relevant. The report also mentions that BIP-360 was merged into the BIP repository in February, and that Galaxy itself has committed to investing 5 million US dollars in quantum computing preparations.