Galaxy recommends accumulating Bitcoin ahead of the next rally

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Galaxy recommends accumulating Bitcoin

Why Galaxy expects Bitcoin to recover

One of Thorn's main arguments is the improvement in Bitcoin's technical outlook. After trading below its 50-week moving average for 44 weeks, Bitcoin managed to break above that level. The cryptocurrency has now recorded five consecutive weekly closes above it, which the analyst sees as confirmation that the market has bottomed.

Another positive signal is the reduction in speculative positions. According to Galaxy, asset managers' net long positions in Bitcoin futures on the Chicago Mercantile Exchange (CME) have fallen by 57% compared with the week when the cryptocurrency reached its all-time high.

At the same time, several major trading firms have significantly reduced their holdings in spot Bitcoin ETFs. Thorn believes the departure of short-term speculators has made the market structure more resilient.

Meanwhile, long-term investors continue to buy the cryptocurrency. Since the June low, U.S. spot Bitcoin ETFs have attracted approximately 87,000 BTC. Galaxy views this as a sign of recovering investment demand amid declining arbitrage activity.

What could prevent Bitcoin from rising?

Beyond technical factors, Galaxy is also focusing on the macroeconomic situation in the U.S. Rising government debt, persistent budget deficits, and increasing debt-servicing costs could make Bitcoin more attractive as an asset with a limited supply.

Thorn also notes that institutional investors are currently showing greater interest in stablecoins and asset tokenization than in Bitcoin itself. In his view, similar shifts in sentiment have occurred near previous cryptocurrency market bottoms.

However, Galaxy analysts acknowledge several risks. These include a potential decline in global financial markets, developments in the artificial intelligence industry, and advances in quantum computing.

Thorn considers $76,540 a key technical level. If Bitcoin closes a week below this level and fails to recover within a month, it would cast doubt on the scenario that the bear market has ended.

Nevertheless, Galaxy believes that a combination of technical signals, reduced speculative activity, and macroeconomic factors is creating favorable conditions for a further Bitcoin recovery.

Additional growth factors

One of Bitcoin's long-term growth drivers remains its limited supply. The maximum number of coins is capped at 21 million BTC, most of which have already been mined. Halving events, which occur approximately every four years and cut miners' block rewards in half, also play an important role. The most recent halving took place in April 2024, reducing the reward for mining a block from 6.25 to 3.125 BTC. Historically, these events have been followed by periods of significant price appreciation, although this pattern does not guarantee a repeat.

Another potential growth driver is expanding institutional demand. The launch of spot Bitcoin ETFs in the U.S. has made the cryptocurrency more accessible to major investors, while some publicly traded companies continue to build their own Bitcoin reserves. The limited supply of new coins, combined with a potential increase in demand, could support prices over the long term. However, Bitcoin's future performance will also depend on Federal Reserve monetary policy, the state of the global economy, and investors' willingness to take risks.

As a reminder, Galaxy Digital shares face risks related to CoreWeave.

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