Galaxy Digital head of research Alex Thorn believes Bitcoin’s bear market ended in June 2026 and shifted into an accumulation phase, citing technical indicators, long-term holder behavior and changes in institutional positioning. Thorn said current levels may be attractive for buying or holding Bitcoin and allowed for a return to $125,000, although that scenario depends on technical support holding, spot demand stabilizing and no new macroeconomic shocks.

Technical indicators point to a potential bottom

Bitcoin held near its 200-week moving average in June 2026 and later moved back above its 50-week moving average after trading below it for 44 weeks, according to the report. Its maximum drawdown from the all-time high was about 53%, compared with declines of 77% to 93% in previous bear cycles.

The MVRV ratio stands at 1.10, while the average acquisition price for current Bitcoin holders is $74,811. SOPR is 1.009 and remains near 1, indicating that coins are being sold at roughly their purchase price.

Long-term holders have also reduced their selling. They sold about 67,000 BTC per month in 2024, compared with 34,000 BTC per month in 2026, Galaxy Digital said. Bitcoin’s performance against its 50- and 200-week moving averages since 2016 is detailed in the report.

Institutional investors reduce positions

Institutional investors’ net long position in CME Bitcoin futures fell by about 57%, from 43,300 BTC to 18,400 BTC. Short positions declined from 71,400 BTC to 30,600 BTC, open interest dropped by 51%, and returns on arbitrage strategies fell from 7.9% to 4.8%.

Some investors also reduced their holdings in spot Bitcoin ETFs. Their combined positions fell from 355,000 BTC to 307,000 BTC, with nine large institutions cutting a total of 68,000 BTC. Other participants that disclosed their holdings continued to buy. CME positioning data are included in Galaxy’s report.

Outflows from the funds were only about 11% relative to their peak level, while ETFs have taken in roughly 87,000 BTC since the June low. Thorn said the position reductions did not necessarily mean that all institutional investors had lost interest in Bitcoin.

Debt and AI spending support the long-term case

Galaxy cited rising U.S. government debt, the budget deficit and debt-servicing costs among the fundamental factors supporting Bitcoin. The report put government debt at $40.44 trillion, the budget deficit at $1.99 trillion and interest expenses at $1.28 trillion. It said the 10-year Treasury yield was as high as 5.31%, the Federal Reserve’s policy rate was in a 3.75%-4% range and annual inflation stood at 3.7%.

The report also identified artificial-intelligence investment as an additional source of pressure on the financial system. It estimated that debt financing for AI infrastructure would reach $570 billion in 2026, while total capital needs through 2028 would amount to $1.5 trillion.

In that environment, Bitcoin is viewed as an asset whose supply does not depend on central-bank decisions. Galaxy cautioned that this does not guarantee a price increase because demand, liquidity and investors’ overall risk appetite will continue to drive the market.

Interest in Bitcoin remains subdued

Thorn also cited weak market interest as evidence of a possible bottom. In 2015-2016 and 2018-2019, attention shifted from Bitcoin to blockchain, while Galaxy believes stablecoins and tokenization are having a similar effect in 2026.

Stablecoin supply has risen by 129% to $304 billion, while search interest in Bitcoin remains low. The Fear and Greed Index fell to 5 in February and stood at 15 near the June low, compared with 71 at the market peak in October 2025. Bitcoin has risen 39% since the June low, but Thorn said limited broader interest may indicate an absence of the excessive optimism associated with market tops.

Risks to the outlook

Galaxy said the outlook would weaken if Bitcoin remained below its 50-week moving average, currently at $76,540, and failed to recover that level within a month. Aggregate ETF holdings falling below 1.22 million BTC, the level recorded on July 13, could also signal further deterioration in institutional demand.

The report identified quantum computing as another potential risk. About 7.1 million BTC, or 35.4% of supply, is held at addresses with exposed public keys, according to Thorn. No quantum computer can currently break Bitcoin’s cryptography, and researchers estimate that doing so would require more than 500,000 physical qubits; the Google chip cited in the report has 105. Defensive initiatives include BIP-360, $5 million in Galaxy funding and the $15 million Bitcoin Security Consortium.

Tighter financial conditions or worsening liquidity could also reduce demand for risk assets even if Bitcoin’s long-term thesis remains intact. Separately, earlier experts identified $70,000 as a support level and noted a record inflow of Bitcoin from retail investors.

Source: Incrypted