Galaxy Research Head: Bitcoin Could Further Retreat to Around $70K, Even Test $58K

BlockBeats News, February 3rd, Galaxy Research Director Alex Thorn posted on the X platform, stating that on-chain data, technical weakening at key price levels, macro uncertainty, and a lack of clear short-term catalysts indicate that BTC may continue to weaken in the coming weeks to months, potentially testing the 200-week moving average. Historically, these levels have often been excellent entry points for long-term investors.

From January 28th to January 31st, Bitcoin saw a cumulative 15% decline, accelerating its downward trend over the weekend. It dropped by 10% in just one day on Saturday, with approximately 46% of Bitcoin's supply currently at a loss. After the January close, Bitcoin experienced four consecutive monthly candle closes in decline for the first time since 2018. Except for the special year of 2017, Bitcoin has never experienced a scenario where, after an ATH retracement of 40%, the retracement did not further expand to over 50% within three months. If BTC retraces 50% from its current ATH, the price would be around $63,000.

The $82,000 to $70,000 range exhibits a significant on-chain holding vacuum, increasing the possibility of a short-term downturn to test the demand in that range. The current realized price is around $56,000, and the 200-week moving average is around $58,000. Currently, there is still a lack of clear evidence of whale accumulation or significant holding increases by long-term holders, but profit-taking by long-term holders is noticeably slowing down. Short-term catalysts are still lacking; Bitcoin has not participated in "currency debasement hedge trades" alongside gold and silver, which is also unfavorable to its narrative. Although regulatory clarity in the crypto market (the "CLARITY Act") could act as an exogenous catalyst if passed, the probability of passing in the near term has decreased. Even if passed, its positive impact is more likely to benefit altcoins rather than BTC.

Despite BTC possibly oscillating around a -10% discount to the ETF cost basis (currently around $76,000), considering the above factors, the probability of Bitcoin further testing the supply gap bottom near $70,000 and potentially testing the realized price ($56,000) and the 200-week moving average ($58,000) remains high, likely over the next few weeks to months. Historically, these areas have often signaled cycle bottoms and provided strong entry opportunities for long-term investors.