Key Takeaways
Why did Galaxy Research cut its BTC target by 35%?
The company believes that continued dumping by long-term holders and other factors could limit BTC’s upside.
Is the market positioning in line with the projection?
Yes, but there was also active hedging for a possible dip to the $80,000-$95,000 price zone.
The Bullish Outlook for Bitcoin [BTC] with targets of $150,000 to $200,000 by 2025 seems far-fetched given the market’s continued weakness.
In the latest report, Galaxy Research cut its year-end forecast by 35% from $185,000 to $120,000.
Alex Thorn, Head of Firmwide Research, cited the continued mass distribution of whales, the BTC government bond crisis and competition from other stories as reasons for the rating downgrade.
The October 10 crash also had consequences for 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 last seen in June.
This represented a 22% decline from last month’s peak of $126,000, but was still below the 30% typical during bull runs.
At the time of writing, BTC was defending $100,000 and trading at $103.4K. The options market facts for December agreed with Galaxy Research’s projection at the time of writing.
Notably, the top volumes in Options were calls (bullish bets) at the $120k price target, followed by levels of $115k and $112k.
Source: Arkham
In fact, the Put/Call ratio was 0.61 (less than 1), meaning that there was a premium for call options over hedging (puts) until the end of the year. Still, Deribit noted that there was significant downside protection against a move to $80,000.
Put another way, despite bullish hopes for a return to $120,000, some were prepared for a possible dip below $100,000.
For his part, noted BTC analyst Willy Woo said marked that the “liquidity behind BTC” has started to recover and could drive it higher in the second half of November.
Source:
Interestingly, even Galaxy founder Mike Novogratz expected the crypto asset to soar higher than $126,000. He added,
“I don’t think we’ve seen cycle highs. I think we’ll see a new Fed chairman by the end of the year and he’ll be much more dovish than the markets are used to.”
He said the ongoing sell-off, driven by rebalancing by long-term holders, was healthy in the medium to long term, despite temporarily slowing the market in the short term.