Galaxy Research slashes Bitcoin’s year-end target by 35% to $120K – Why?

Key Takeaways

Why has Galaxy Research dropped its BTC target by 35%?

The firm believes that the ongoing dumping by long-term holders and other factors could cap BTC’s upside.

Is market positioning aligned with the projection?

Yes, but there was also active hedging for a potential dip to $80k-$95k price zone. 

The bullish outlook for Bitcoin [BTC] with 2025 targets of $150k-$200k appears far-fetched amid ongoing market weakness.

In the latest report, Galaxy Research has downgraded its year-end projection by 35% to $120k from $185k.

Alex Thorn, the Head of Firmwide Research, cited the ongoing massive whale distribution, the BTC treasury companies’ crisis, and competition from other narratives as reasons for the downgrade.

The October 10 crash also impacted the market structure. However, he added that the long-term outlook remained bullish. 

Source: Galaxy Research 

What’s next for BTC?

The crypto asset extended its correction to $98.9K on November 4, a record low that was last seen in June.

This represented a 22% drop from its peak of $126K last month, but was still below the 30% common pullbacks during bull runs.  

As of press time, BTC defended $100K and traded at $103.4K. The Options market data for December, as of writing, agreed with Galaxy Research’s projection.

Notably, the top Options volumes were calls (bullish bets) for $120k price target, followed by $115k and $112k levels. 

Source: Arkham

In fact, the Put/Call ratio was at 0.61 (below 1), meaning that there was a premium for calls over hedging (puts) into year-end. Even so, Deribit noted that there was considerable downside protection against a move to $80K. 

Put differently, despite bullish hopes for a return to $120K, some were prepared for a potential dip below $100K. 

For his part, renowned BTC analyst Willy Woo highlighted that the “liquidity behind BTC” had begun to recover and could drive it higher in the second half of November. 

Source: X

Interestingly, even Galaxy founder Mike Novogratz expected the crypto asset to rally higher beyond $126k. He added, 

“I do not think we have seen cycle highs.   I think by year-end we see a new Fed chair and he will be far more dovish than markets are used to.”

According to him, the ongoing sell-off, resulting from rebalancing by long-term holders, was healthy in the mid- to long-term, despite temporarily dragging the market in the near term.