Bitcoin could extend its decline toward $56,000 as clear catalysts for a sustained rebound remain elusive, according to Galaxy Digital research head Alex Thorn.
Thorn said there is a “significant chance” Bitcoin first fills a supply gap near $70,000 before testing its realised price of $56,000, which represents the average cost basis of all coins in circulation.
“Catalysts remain hard to find and narratives are also working against Bitcoin as it fails to trade along with gold and silver as part of a market-wide debasement hedge trade,”
Thorn said.
He noted that Bitcoin has historically found cycle bottoms around or slightly below its realised price, often coinciding with tests of the 200-week moving average, now near $58,000.
Thorn added that Bitcoin lost support at its 50-week moving average in November, a technical breakdown that has previously preceded deeper drawdowns before long-term recoveries.
While there is little evidence of strong accumulation from large buyers, Thorn said long-term holder profit-taking has “begun to notably abate,” which may indicate the market is approaching a bottom.
He also said a potential US crypto market structure bill is unlikely to provide meaningful upside for Bitcoin even if passed, adding that any regulatory boost would “more likely yield benefit to altcoins than BTC.”
At the time of reporting, Bitcoin price was $78,745.95.