New Insights on Bitcoin Price Cycles
Recent research from Galaxy Digital indicates that a lack of speculation may lead Bitcoin’s cycle lows to be at higher price points compared to previous bear markets. The analysis suggests the potential bottom could range between $62,000 and the network’s realized price of $53,600.
Alex Thorne, Galaxy’s research head, examined the fluctuations in Bitcoin cycles and noted that the four-year cycle still closely aligns with historical trends. He observed a narrowing in the peak-to-bottom decline rate, which has decreased from 85% and 84% in earlier cycles to 77% in 2022, and further down to 51% projected for 2026.
Thorne believes that the upcoming high for Bitcoin in October 2025 will differ from previous peaks. Notably, out of 11 traditional top indicators, only two have signaled; additionally, the widely monitored Pi Cycle Top signal did not trigger this time. He pointed out that Bitcoin’s MVRV ratio—measuring the market value to realized value—peaked at 2.29, a notable drop from the ranges of 2.93 to 5.91 typically seen in prior cycles. He mentioned,
“Key insight: A calm top drives a bottom. With October’s very calm top, the network’s cost basis remains at 43.7% of ATH, in contrast to about 34%, 21%, and 17% in preceding cycles.”
The report also highlighted that several critical bottom signals are still absent. Currently, only 4 out of 13 indicators have been activated, with most stronger signals yet to be identified.
Additionally, historical timelines indicate the possibility of a future bottom. Thorne noted that the previous cycle’s bottom arrived roughly 12-13 months after the market’s peak, whereas the current downturn began around 8 months ago.
Based on the existing cost base of $53,600, Galaxy predicts the lower end of the base case to fall between $40,000 to $46,000. A more severe “washout scenario” could suggest a drop to $30,000 to $37,000, while a milder decline might keep values around $51,000 to $54,000. However, he cautioned:
“The catch is that the floor can move. The cost base is reflexive. In a real panic, the coin changes hands at a loss, driving the average downward. A 10-30% drop in the cost base could shift the implicit floor from about $40,000 down to $28,000.”
On another note, CryptoQuant’s on-chain analysis reveals that Bitcoin is currently valued in a range typically linked to significant bear market lows. BTC has been trading near $59,000, approximately 9% above the realized price of $53,600.
The bottoms from past cycles, such as the November 2022 FTX incident, often formed at or slightly below realized prices, suggesting that the upcoming bottom range could again dip beneath the $53,600 cost basis, aligning with Galaxy’s predictions of $46,000 to $40,000.
The demand landscape appears less optimistic, with CryptoQuant reporting a weekly drop of 652,000 BTC in speculative futures and apparent spot demand. This marks the most significant decrease since January 2022. Furthermore, their one-year demand measurement has turned negative, reflecting that there are now fewer buyers for BTC compared to a year prior.
