Bitcoin Eyes $125K as Galaxy Says Bear Market Has Ended

Galaxy Research has declared bitcoin's bear market over and set a price target of $125,000, saying the conditions needed to drive the cryptocurrency back to record territory are quietly falling into place. In a research note published this week, Galaxy head of research Alex Thorn wrote that bitcoin 'has proven its ability to run to at least $125K, and we see no reason why it cannot retake that level.'

At the time of Galaxy's analysis, bitcoin was trading around $80,762 on Bitstamp, well below its prior all-time high but firming above a closely watched technical support level. The 50-week moving average, sitting near $76,540, has acted as a floor, with bitcoin posting five consecutive weekly closes above it through October 18.

Galaxy traced the bear market's start and finish using that same moving average. Bitcoin spent 44 weeks below the indicator before its recovery, and the cycle's maximum drawdown reached 53 percent — shallower, the firm noted, than several earlier bear markets. Historical patterns, Galaxy argued, show that previous bitcoin advances reclaimed all-time highs within 33 to 83 weeks of a cycle trough.

Institutional demand has been a central pillar of the firm's bullish case. Spot bitcoin ETFs absorbed a net 87,000 BTC following the June low, even as trading firms trimmed roughly 68,000 BTC from their own ETF positions. Separate institutional buyers added another 20,000 BTC between September 2025 and June 2026, according to Galaxy's data.

On-chain metrics are also flashing what Galaxy describes as diminishing sell pressure. Dormant coin movement — coins that had not been transferred for an extended period suddenly being sent — fell to roughly 34,000 BTC in 2026, down from about 67,000 BTC in 2024. The firm read that trend as a sign that long-term holders are less eager to distribute into the current market.

Short-term holder behaviour reinforces the picture. Galaxy found that only about 9 percent of short-term holders are currently sitting above their average acquisition cost, limiting the cohort's incentive or ability to take profits aggressively. Profit-taking activity from this group has remained minimal, the firm said.

The macroeconomic backdrop, often cited as a double-edged sword for risk assets, is being framed by Galaxy as a net tailwind for bitcoin specifically. U.S. federal debt stands at $40.44 trillion, with an annual deficit running at $1.99 trillion. The firm also projects roughly $570 billion in AI-related debt issuance in 2026, adding to fiscal pressures that historically have nudged investors toward hard-asset alternatives.

Stablecoin supply has expanded 129 percent since early 2024 to reach $304 billion, a figure Galaxy highlighted as evidence of substantial dry powder waiting on the sidelines of crypto markets. A large stablecoin float has in prior cycles preceded bursts of buying activity once sentiment turned.

Despite the constructive framing, Galaxy stopped short of offering a precise timeline for when bitcoin might reach $125,000, and the note did not provide a specific price catalyst. The firm acknowledged that investor attention to the sector remains subdued, which it cast as a contrarian positive — less crowded positioning tends to leave more room for upside surprises.

Bitcoin's ability to hold the $76,540 moving-average support in the weeks ahead will likely determine whether the recovery thesis holds. Market participants will be watching ETF flow data and on-chain dormancy metrics closely as proxies for whether the supply and demand dynamics Galaxy described are continuing to tighten.