Galaxy Digital research head Alex Thorn warns that Bitcoin could continue to slide because there are few clear catalysts to reverse its downtrend. In a recent note he said there is a “significant chance” BTC could fall to the bottom of a supply gap near $70,000 and potentially test its realized price — the average cost basis of all circulating BTC — near $56,000.
Thorn argues that prevailing narratives are working against Bitcoin. It has not moved in tandem with gold and silver as a market-wide “debasement hedge,” and meaningful positive news or buying pressure has been scarce. Bitcoin did rally roughly 3% to about $78,500 after bouncing from a nine-month low, but it still sits roughly 39% below its early-October all-time high above $126,000.
Looking at historical behavior, Bitcoin has often traded below its realized price at past cycle lows and typically found support around or slightly below that level before recovering. It has also tended to find long-term support at the 200-week moving average during previous sell-offs when the 50-week moving average failed to hold. Bitcoin lost the 50-week MA in November; the 200-week MA is currently around $58,000, levels that have marked cycle bottoms and buying opportunities for long-term investors in prior cycles.
On demand dynamics, Thorn sees little evidence of meaningful accumulation by large buyers or long-term holders, which could put downward pressure on price as potential buyers sit out and wait for cheaper levels. At the same time, long-term holder profit-taking has “begun to notably abate,” a sign that the market may be approaching a bottom. Still, some holders may delay selling until prices move higher, which could limit rallies.
A U.S. crypto market-structure bill under consideration in the Senate remains a possible external catalyst, but Thorn says the odds of passage have fallen recently amid waning bipartisan momentum and committee delays. He also suggests that any favorable policy outcome would probably help altcoins more than Bitcoin.
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