[Digital Today intern reporter Seung-a Yoo] Galaxy Research analysed that bitcoin's bear market ended last June and that it has now entered an accumulation phase.

Bitcoin Magazine reported on Oct. 26 (local time) that Galaxy Research said in a report, "Now is an attractive time to buy and hold bitcoin." Bitcoin was trading near $80,000 at the time the report was written. That was about 35 percent below the October 2025 peak but 39 percent above the June 30 low. It needs to rise about 53 percent more to regain the previous record high.

Galaxy Research cited four factors: technical indicators, market positioning, the U.S. fiscal situation and investor sentiment.

◆ Technical indicators recover... has the long-term downtrend ended?

Bitcoin fell below its 50-week moving average in November 2025 and stayed under it for 44 weeks. It then held the 200-week moving average at the June low and regained the 50-week moving average in September. It closed above that line for five straight weeks through the week ended Oct. 18. Of 13 recovery cases since 2011, four in which it stayed below the moving average for 20 weeks or more rose 55 to 1,497 percent a year later. By contrast, in nine cases where it stayed below for less than 20 weeks, seven fell more than 25 percent within a year. This decline of 53 percent was the smallest among past cycles. Oct. 22, the 916th day after the halving, was beyond the 777 to 912 days seen as the timing of bottoms in the three previous cycles.

◆ Institutional selling pressure eases... supply-demand improves

U.S. Commodity Futures Trading Commission (CFTC) data showed asset managers' net long position in CME bitcoin futures fell 57 percent from the week of the record-high print. The annualised arbitrage yield using spot ETFs and futures also dropped to 4.8 percent from 7.9 percent. In 13F filings, nine institutions cut spot ETF holdings by a combined 68,000 BTC from the end of September 2025 to the end of June 2026. Holdings among 2,200 reporting institutions fell by only 48,000 BTC, suggesting the remaining institutions were net buyers overall, it said. Spot ETF holdings fell 11 percent from the peak, but 87,000 BTC flowed back in after the June low.

◆ U.S. fiscal burden... inflation pressure in focus

U.S. federal debt stood at $40.44 trillion as of Oct. 20, and the fiscal deficit for fiscal 2026 was $1.99 trillion. The 10-year Treasury yield climbed to as high as 5.31 percent on Oct. 5, its highest since 2007. Galaxy Research analysed that inflation pressure could increase if the government refinances debt at 5 percent interest rates while maintaining a fiscal deficit equivalent to 6 percent of GDP. It also cited Morgan Stanley's forecast this year of $570 billion in AI-related borrowing as another factor adding to macroeconomic strain.

◆ Attention shifts to assets other than bitcoin... hopes for a sentiment reversal

Galaxy Research compared current investor sentiment with bottom-formation periods in 2015 to 2016 and 2018 to 2019. At the time, the financial sector showed interest in blockchain but was sceptical about bitcoin. It said that this year, too, interest is tilting toward stablecoins and tokenisation over bitcoin, citing banks' tokenised deposit experiments, the U.S. Senate's rejection on Sept. 15 of a cloture motion on the Clarity Act, and bitcoin search volume at multi-year lows.

Galaxy Research said optimism should be reconsidered if bitcoin posts a weekly close below its 50-week moving average of about $76,540 and fails to recover within a month. It mentioned the $387.5 million Bitget hack and quantum computing risk, but said there is currently no quantum computer capable of decrypting bitcoin's encryption. Galaxy added it would invest $5 million to prepare for quantum computing.