Bitcoin's 'Calm Top' Reshapes Bottom Estimates: Galaxy Research

New research into Bitcoin's (BTCUSD) anticipated bear market bottom reveals a distinct pattern compared to previous cycles. An analysis by Galaxy Research indicates that Bitcoin's latest cycle top in October 2025 was notably 'calm,' contrary to the extreme speculative euphoria observed historically. This suggests that the market bottom could materialize at higher price levels than the 'washout' scenarios seen in the past.

Alex Thorn, Head of Research at Galaxy, emphasized that Bitcoin's four-year cycle remains active but is undergoing compression, with peak-to-trough declines narrowing. While previous cycles saw declines of 85%, 84%, and 77% in 2022, the current drawdown has been around 51%. At the October 2025 peak, only two out of eleven traditional topping indicators flashed, and the widely followed Pi Cycle Top indicator failed to trigger for the first time, signaling reduced speculative pressure in the market. Furthermore, the MVRV ratio, which compares market value to realized value, peaked at 2.29, significantly lower than the 2.93-5.91 range in prior cycles, reinforcing this sentiment of a calmer peak.

This 'calm top' phenomenon is believed to elevate Bitcoin's cost basis (realized price) closer to the peak, thereby setting a higher floor for a potential market bottom. According to the analysis, the network's cost basis currently stands at 43.7% of its all-time high, a considerably higher percentage compared to the 17% to 34% observed in previous cycles. Given that the current drawdown is approximately eight months old, and historical cycle bottoms typically formed 12 to 13 months after a peak, the true bottom may still be ahead. Galaxy's data further indicates that only four out of thirteen key bottoming signals have triggered so far, suggesting the bottom has not fully formed.

In terms of market impact, this analysis suggests that Bitcoin's traditional '75-85% fall' rule might be obsolete. Galaxy's base-case scenario projects Bitcoin's bottom to be in the range of $40,000 to $46,000. A shallower decline could see prices hold near $51,000 to $54,000, while a more severe 'washout' scenario could push prices down to the $30,000 to $37,000 range. Bitcoin's realized price, representing the average cost basis for investors, is currently around $53,600.

This development aligns with the broader economic context of Bitcoin maturing as an asset class, exhibiting less volatility, and undergoing a shift in market structure. Factors such as the approval of spot Bitcoin Exchange-Traded Funds (ETFs) may have accelerated institutional capital inflow, potentially moving the market away from its retail-driven 'boom and bust' cycles. However, other analytics firms like CryptoQuant also note that Bitcoin is trading within a valuation zone historically associated with bear market lows, albeit with shrinking overall demand.

Analysts and market participants are closely monitoring Bitcoin's price movements in the coming period. Galaxy Research anticipates that the bottom formation could extend into the fourth quarter of 2026. However, Alex Thorn cautions that in the event of a genuine market panic, the cost basis could be dragged lower, altering the potential bottom levels. Conversely, some analysts, such as Geoffrey Kendrick from Standard Chartered, argue that the bottom might have already occurred around $59,000, citing easing geopolitical tensions and resilient institutional demand.