Bitcoin trades at $80,762.07 on Bitstamp, up 1.09 percent over the past 24 hours. Galaxy, a digital asset financial services firm, argues conditions are favorable for Bitcoin to retake the $125,000 level.
Galaxy's research asserts Bitcoin's bear market concluded in June. Alex Thorn, head of firmwide research at Galaxy, based this recovery assessment on reduced selling pressure and resilient investor demand.
"Bitcoin has proven its ability to run to at least $125K, and we see no reason why it can't retake that level, and indeed the setup looks favorable," Thorn said. "Bitcoin is now in an accumulation phase, a pattern observed before every previous advance."
Galaxy's analysis highlighted four historical recoveries where Bitcoin spent at least 20 weeks below its 50-week moving average. Each instance saw Bitcoin regain its prior all-time high within 33 to 83 weeks.
Bitcoin crossed $84,000 in September, reclaiming its 50-week average after spending 44 weeks below it. Through Oct. 18, Bitcoin recorded five consecutive weekly closes above this key technical threshold.
On-chain indicators support this assessment. Bitcoin's maximum drawdown of 53 percent was shallower than earlier bear markets. The asset consistently remained above the network's aggregate on-chain cost basis.
Short-term holders currently sit approximately nine percent above their average acquisition cost, showing no substantial profit-taking activity. This indicates a lack of significant selling pressure from newer market participants.
Spot Bitcoin exchange-traded funds added 87,000 BTC after the June low, according to Galaxy's findings. This confirms institutional absorption of supply. Ki Young Ju, CEO of blockchain analytics firm Cryptoquant, identified in July that ETF and corporate buyers were absorbing sales from older holders.
Institutional demand persisted despite some trading firms reducing their exposure. Nine firms collectively lowered their ETF holdings by 68,000 BTC between September 2025 and June 2026. However, other reporting institutions collectively added 20,000 BTC during the same period.
The monthly movement of Bitcoin coins dormant for at least five years declined, falling to 34,000 BTC so far in 2026 from 67,000 BTC in 2024. This reduction in long-term holder movement signals decreased selling from seasoned investors.
Thorn's argument is bolstered by government borrowing trends. The United States' $40.44 trillion federal debt, a $1.99 trillion annual deficit, and Morgan Stanley's expectation of $570 billion in AI-related debt issuance during 2026 contrast sharply with Bitcoin's predetermined issuance, capped at approximately 21 million coins.
Investor attention currently favors stablecoins and tokenization, with stablecoin supply expanding 129 percent since early 2024 to $304 billion. This mirrors earlier periods where institutional focus on blockchain applications overshadowed direct Bitcoin accumulation, suggesting potential for a rotation back into Bitcoin.
