Why Galaxy Research believes THIS level could end Bitcoin’s bear market

Bitcoin’s weekly gains hit 25%, and it nearly cleared the $80K mark after $4B in short liquidations and a macro-driven regime shift. The rally reclaimed the key 200-day Moving Average (currently at $69K), and the short-term holder (STH) realized cost basis of $68K. 

From a price technical perspective, reclaiming these key levels meant the short and midterm structure for BTC has flipped bullish. But the question remains: Does it mean the bear market is behind us? 

Bitcoin rally: A dead-cat bounce or start of a bull run?

For his part, Jake Ostrovskis, Head of OTC (over-the-counter) trading at market maker Wintermute, acknowledged that this week can’t be faded. 

However, he added that there was no “full participation” to signal a true trend reversal and regime shift as claimed by others. 

But zoom out and positioning doesn’t yet show full participation: OI well below YTD highs, let alone ’25/4, basis still sub-5%, skew only just flipped positive, wings still cheap. Hard to argue positioning is ‘stretched’ here in a new regime.

Basis yield is the spread hedge funds lock in if they buy a U.S Spot BTC ETF and sell an equivalent BTC futures contract over CME. During the bull run in 2024, the yield averaged 10%. It collapsed after the October crash and has been flat around 5%. 

For Wintermute’s Ostrovskis, this meant the institutional participation seen in the past was yet to join the recent bounce. According to him, this signals caution, not a full bullish regime shift. 

Surprisingly, Jason Calanis, founder of All In Podcast and serial internet entrepreneur, called the rally a “dead-cat bounce.” In most cases, dead-cat bounces are fake breakouts that end up being reversed. 

In fact, others expected BTC to reverse and retest $70K-$72K ahead of next week’s Jackson Hole meeting for central banks. 

For their part, Galaxy Research analysts said the end of the BTC bear market could be confirmed if $82K is reclaimed, citing the 50-week Moving Average (MA). 

11 of 13 times BTCUSD reclaimed the 50W MA during completed bear markets, the bear-market low was in. If BTCUSD reclaims it on weekly close, history suggests the bear market would likely be over.

What’s next for BTC?

That said, AMBCrypto established that BTC 25 Delta Skew fell to zero across 1-week and 1-month tenors, suggesting less demand for put options (downside protection). In other words, the year-long market fear and overhang have faded significantly this week. 

It remains to be seen whether the Jackson Hole event will reinforce the positive risk-on sentiment and fuel the BTC rally. 

Final Summary

• BTC has rallied +25% this week and reclaimed the key 200-day Moving Average and STH cost basis 
• The bear market could be over if BTC reclaims $82K, according to Galaxy Research