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Galaxy Digital research warns Bitcoin price could fall to $56,000
Bitcoin is entering one of its most challenging phases in recent years after a sharp sell-off wiped out billions of dollars in leveraged positions and pushed a large share of holders into losses.
Highlights
- Bitcoin fell nearly 15% in late January, dropping from $90,562 to about $74,551
- More than $2 billion in leveraged long positions were liquidated
- Around 46% of Bitcoin supply is now held at a loss
- Galaxy Digital’s Alex Thorn sees key support near $56,000–$58,000
- Bitcoin is trading below the average cost basis of U.S. spot Bitcoin ETFs
According to Galaxy Digital’s head of research, Alex Thorn, the world’s largest cryptocurrency could fall further in the coming weeks, with key support levels near $56,000 now in focus.
The warning comes after Bitcoin dropped nearly 15% in late January, marking one of its steepest weekly declines of the current market cycle.
Sharp sell-off triggers record liquidations
Bitcoin’s decline accelerated after it retreated from last week’s high of $90,562 to around $74,551, close to its April 2025 low. The sudden move triggered more than $2 billion in liquidations of long positions in leveraged futures markets, making it one of the largest liquidation events in Bitcoin’s history.
Selling pressure has extended beyond short-term traders. Data show that nearly 46% of the total Bitcoin supply is now “underwater,” meaning it was acquired at prices above the current market level. This suggests rising stress among investors who entered the market during the recent rally toward record highs.
Key Support Levels Under Pressure
Thorn also noted that Bitcoin has fallen below the average purchase price of U.S. spot Bitcoin exchange-traded funds, estimated at about $84,000. ETF investors are typically viewed as longer-term holders, and trading below their cost basis is widely regarded as a negative signal for market sentiment.
From a technical standpoint, Thorn identified Bitcoin’s realized price near $56,000 as a critical support level. He also pointed to the 200-week moving average, currently around $58,000, which has historically served as a floor during prolonged market downturns.
While Bitcoin remains well above its previous cycle lows, Thorn warned that weakening demand, elevated unrealized losses, and continued market uncertainty could push prices closer to these long-term support levels before any sustained recovery takes hold.
We also informed Tether launches open-source tools to decentralize Bitcoin mining.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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