Why Galaxy Digital Sees Bitcoin Entering an Accumulation Phase

Is Bitcoin Quietly Building Strength Behind the Scenes?

If you have been keeping an eye on the crypto markets recently, you might have noticed Bitcoin (BTCBTC-1.30%) trading in a relatively tight range near $80,000. After a strong market run earlier, prices have slowed down, leaving some market participants wondering what comes next.

While short-term price pullbacks often generate cautious sentiment or warnings of a market downturn, researchers at financial firm Galaxy Digital take a different view. According to their recent research report, Bitcoin may have already passed its cycle bottom and entered a classic accumulation period.

"We think the bear market ended in June and that bitcoin is in the accumulation phase that has preceded every prior advance," noted Alex Thorn, Head of Firmwide Research at Galaxy Digital.

Because digital asset prices remain subject to high volatility and swift market shifts, understanding the underlying data behind these research claims can help investors assess the bigger picture.

Who Is Galaxy Digital?

To give context to this analysis, Galaxy Digital is a U.S.-based financial services and digital asset infrastructure company. Founded in 2018 by billionaire investor Mike Novogratz, the firm is headquartered in New York City and trades publicly on Nasdaq under the ticker symbol GLXY.

The firm provides institutional investment management, trading, and research services across the digital asset ecosystem, making their market reports widely followed across the industry.

Understanding the June Low and the Accumulation Phase

In his research note titled "Why now is the time to add and hold BTC," Alex Thorn highlights that June marked a crucial turning point when Bitcoin dipped under $58,000. Galaxy considers that price level to be the likely bottom of the recent bear market cycle.

At the time of Galaxy's report, Bitcoin was trading near $80,000. That represents a 38% recovery from the June lows. However, it is also worth noting that Bitcoin remains roughly 35% below its all-time high of over $126,000. For Bitcoin to reach that prior record peak again, it would need to gain approximately 53% from current levels.

Past performance of digital assets is not an indication of future results. You can view full market data at bitkub.com/th/market/BTC.

An accumulation phase in market cycles usually refers to a period where long-term investors steadily build positions while short-term speculative interest subsides. This phase often creates a base before any potential future trend develops.

Key Technical Signal: The 50-Week Moving Average

Technical analysts rely on moving averages to smooth out short-term price fluctuations and identify long-term direction. One key indicator emphasized in Galaxy's analysis is Bitcoin's 50-week moving average.

After spending 44 consecutive weeks trading below its 50-week moving average, Bitcoin recently climbed back above this long-term trendline. More importantly, the market recorded five consecutive weekly closes above this level.

In technical research, sustained weekly closes above major long-term moving averages often signal that selling pressure has diminished and that underlying market structure is strengthening.

'Fast Money' Exits the Market

Beyond chart signals, Galaxy examined market positioning among futures traders and institutional funds to gauge market health.

Their findings show that short-term speculative positioning has dropped significantly:

• Futures Long Exposure Dropped: Asset managers' net long exposure through CME Bitcoin futures fell by 57% compared to the levels seen during the record high.
• Reduced ETF Holdings by Trading Firms: Several major trading firms significantly pared back their spot ETF holdings following the peak.
• Healthier Market Structure: Speculative leverage and arbitrage-focused traders have largely exited, leaving behind a more stable holder base.

"The fast money has left, the base stayed, and everything else is priced for perfection," Thorn explained, suggesting that lower speculative leverage reduces the risk of sudden cascade liquidations.

Spot ETF Demand and Institutional Buying

While short-term futures traders reduced exposure, spot Bitcoin ETFs experienced sustained inflows following the June low.

According to Galaxy's data, spot Bitcoin ETFs accumulated an additional 87,000 BTC after the June bottom. This accumulation occurred while cash-and-carry arbitrage opportunities declined, indicating that incoming capital was driven by genuine directional demand rather than short-term yield strategies.

However, investors should remember that while ETF inflows indicate institutional interest, fund flows can reverse quickly during broader risk-off periods in global markets.

Macro Factors: Government Debt and Fiscal Deficits

Galaxy's investment thesis for Bitcoin extends beyond internal crypto market dynamics to macroeconomics.

The research team highlights growing U.S. national debt, persistent government budget deficits, and rising interest servicing costs as major factors supporting hard assets. Because Bitcoin operates with a fixed supply cap of 21 million coins, some market participants view it as a hedge against long-term fiat currency dilution.

Market Sentiment: Why Quiet Periods Matter

Another interesting point raised by Thorn is the current shift in public attention away from Bitcoin toward other crypto sectors, such as stablecoins and real-world asset (RWA) tokenization.

Historically, periods when retail excitement around Bitcoin fades while institutional focus turns to infrastructure development have often coincided with major cycle lows rather than market tops.

Downside Risks and Key Price Thresholds

Galaxy's analysis explicitly outlines conditions that could invalidate their positive technical outlook, emphasizing that market recovery is far from guaranteed.

The primary technical risk identified is a potential weekly close below $76,540. If Bitcoin closes below that level and fails to recover within a month, Galaxy notes that their technical thesis for an ongoing accumulation phase would be challenged.

Additional potential downside risks include:

• Broader Financial Market Pullbacks: Macroeconomic shocks or equity market sell-offs could push crypto prices lower.
• AI and Technological Disruptions: Broader shifts in technology sector capital allocation could impact liquidity.
• Quantum Computing Concerns: Long-term theoretical risks regarding cryptographic security.

Scenario Overview for Bitcoin's Path Ahead

To help understand how these factors interact, analysts view potential market outcomes through different conditional scenarios:

• Bullish Recovery Scenario: If spot ETF inflows remain steady, institutional demand continues, and price stays comfortably above the $76,540 level, Bitcoin could gradually trend back toward its previous high of $126,000 over a 6 to 12 month timeframe.
• Base Consolidation Scenario: If macro conditions remain mixed and ETF demand stays flat, Bitcoin may continue trading sideways within the $76,540 to $90,000 range as accumulation continues.
• Bearish Invalidation Scenario: If global liquidity tightens or price breaks decisively below $76,540 on a weekly basis without a quick recovery, the market could face deeper correction toward previous support zones below $60,000.

By weighing both the technical indicators and potential downside risks, market participants can maintain a balanced perspective on Bitcoin's ongoing cycle.