Galaxy Research told clients the bitcoin bear market ended at the June low and that the asset has moved into an accumulation phase, writing that "now is an attractive time to buy and hold bitcoin." Bitcoin was trading near $80,000 when the note went out, roughly 35% under its October 2025 high and 39% above the June 30 low. Retaking the old record would take a 53% move.
The 200-week floor held
Galaxy's technical argument leans on two moving averages. The 200-week has served as a floor in every prior bear market and the 50-week as a ceiling. Bitcoin lost the 50-week in November 2025 and stayed under it for 44 weeks. It tested the 200-week at the June low, with the worst weekly close landing 4.7% beneath the line, then closed back above the 50-week in September. The week ended Oct. 18 was the fifth straight weekly close above it.
The firm counted 13 reclaims of the 50-week average since 2011. The four that ended spells of 20 weeks or more were higher a year later by between 55% and 1,497%, and none closed more than 8.4% below the reclaim level in the following 12 months. The other nine, which ended shorter spells, were a different story: seven fell more than 25% within a year. The current reclaim came after a 44-week break, so it falls in the first bucket.
Halving cycles offer another marker. Prior cycles bottomed on days 777, 889 and 912 after their halvings, and Oct. 22 was day 916 of this one. Galaxy noted that post-low gains have shrunk each cycle — 87x, 19x, 7.6x — and said it isn't forecasting a repeat.
One distinguishing feature of this drawdown: at 53%, it's the shallowest in bitcoin's history and the first in which price never fell below the network's realized cost basis, according to the firm.
Basis trade loses its cushion
Galaxy's derivatives read supports the view. Asset managers' net long position in CME bitcoin futures fell 57% from the week of the all-time high, and leveraged funds' net short shrank by about the same amount, per CFTC data cited in the note.
The front-month basis averaged 7.9% annualized in the 30 days before the high and 4.8% in the 30 days to Oct. 21. At that level, Galaxy said, the cash-and-carry trade no longer covers its costs and risk.
ETF flows cut the other way. 13F filings show Millennium Management, Brevan Howard, Goldman Sachs, Capula, Farallon, D. E. Shaw, Schonfeld, Symmetry and Tudor reduced spot ETF holdings by 29% to 100% between the September 2025 and June 2026 quarter-ends — a combined 68,000 BTC. Total holdings across all 2,200 filers fell by 48,000 BTC, which means the remaining institutions added in aggregate. Morgan Stanley's wealth management arm, Mubadala and the Abu Dhabi Investment Council were among the buyers.
Spot ETF holdings dropped 11% from peak to trough while bitcoin fell 53%, and the funds have added 87,000 BTC since the June low.
Debt, deficits and a sentiment repeat
On fundamentals, Galaxy points to U.S. fiscal conditions. Federal debt hit $40.44 trillion on Oct. 20, fiscal 2026 closed with a $1.99 trillion deficit, and the 10-year Treasury yield touched 5.31% on Oct. 5 — its highest since 2007. The firm framed AI-related borrowing, which Morgan Stanley expects to reach $570 billion this year, as a contributor to fiscal pressure rather than a competitor for capital.
The sentiment comparison is less flattering. Galaxy likened the current mood to 2015-16 and 2018-19, when mainstream finance embraced "blockchain" and dismissed bitcoin, and both periods coincided with cycle lows. The 2026 version, in its words, is "stablecoins and tokenization, not bitcoin." It cites bank pilots of tokenized deposits, the Senate's failed cloture vote on the Clarity Act on Sept. 15, and Google searches for "bitcoin" at multiyear lows.
Risks the firm flags
Galaxy attached a tripwire to its view: a weekly close below the 50-week average, around $76,540, that isn't regained within a month.
It also addressed two threats without softening them. AI-enabled theft, including the $387.5 million Bitget exploit, is on the rise, though none of the incidents involved the Bitcoin protocol itself. On quantum computing, 7.1 million BTC sit in outputs with exposed public keys, but no cryptographically relevant quantum computer exists. The firm pointed to BIP-360's merge into the BIP repository in February and its own $5 million quantum readiness commitment.
The relative trade
The S&P 500 is within 1% of a record set on Oct. 6. Bitcoin is 35% below its high. Galaxy's buy call is, in effect, a bet that gap closes — and its own tripwire sets the level where that bet goes wrong.
