Galaxy Digital believes Bitcoin is entering a favorable accumulation period, pointing to improving technical indicators, continued spot ETF buying, and rising U.S. debt as factors that could support a recovery toward its previous record high.

Bitcoin has struggled to gain momentum in recent weeks, trading near $80,000 as uncertainty grows over its next direction. The stalled rally has prompted some market participants to warn of another potential downturn.

Galaxy, however, maintains a bullish long-term outlook. Alex Thorn, the firm’s head of firmwide research, believes Bitcoin’s bear market ended in June and that the cryptocurrency has entered a consolidation phase that has historically preceded major rallies.

“We think the bear market ended in June and that bitcoin is in the accumulation phase that has preceded every prior advance,” Thorn wrote in a report titled “Why now is the time to add and hold BTC.”

Founded in 2018 by billionaire Mike Novogratz, Galaxy Digital is a financial services and digital asset infrastructure company headquartered in New York City and listed on Nasdaq under the ticker GLXY.

Thorn said Bitcoin’s improving price structure, declining selling pressure, and mounting U.S. fiscal challenges make the cryptocurrency worth accumulating at current levels.

Bitcoin’s Price Structure Signals Potential Strength

When Galaxy released its analysis, Bitcoin was trading around $80,000, roughly 38% above its June low below $58,000. Despite the recovery, BTC remained approximately 35% below its all-time high of more than $126,000. A return to that level would require a gain of about 53%.

Thorn emphasized Bitcoin’s move above its 50-week moving average after spending 44 weeks below the indicator. Five consecutive weekly closes above that threshold have strengthened his belief that the market may have established a bottom.

Investor positioning also points to a potential shift. Asset managers’ net long exposure through CME Bitcoin futures had declined 57% from the week Bitcoin reached its record high. Several major trading firms had also cut their holdings in spot Bitcoin ETFs.

Thorn interprets these developments as signs that short-term speculative traders have reduced their exposure, potentially leaving the market supported by more committed investors.

“The fast money has left, the base stayed, and everything else is priced for perfection,” he said.

ETF Buying and Fiscal Concerns Bolster Bitcoin

Spot Bitcoin ETFs have continued to attract purchases despite the cryptocurrency’s recent lack of momentum.

Galaxy reported that these funds accumulated approximately 87,000 BTC after the June low. The firm sees the increase as evidence of renewed demand for Bitcoin, particularly as arbitrage-related activity has declined.

The broader U.S. fiscal outlook also forms part of Galaxy’s investment case. Rising government debt, persistent budget deficits, and higher interest costs could make Bitcoin more attractive to investors seeking exposure to an asset with a fixed supply.

Thorn also noted that market attention has increasingly shifted toward stablecoins and tokenization while interest in Bitcoin has weakened. He believes this sentiment resembles conditions that have appeared near previous market bottoms.

$76,540 Emerges as a Key Level to Watch

Galaxy acknowledged several risks that could weaken its outlook, including a broader market downturn, disruption from artificial intelligence, and potential security challenges associated with quantum computing.

The firm identified $76,540 as an important technical threshold. A weekly close below that level, followed by a failure to recover within a month, would challenge the view that Bitcoin’s market bottom is already in place.

Despite these risks, Galaxy believes the combination of improving technical signals, continued ETF accumulation, and mounting U.S. fiscal pressures supports the possibility of a recovery toward Bitcoin’s previous all-time high.