Galaxy Research Warns Bitcoin Price May Hit $40K by Late 2026
Galaxy Research warns the Bitcoin price may not have finished its cycle bottom. Using market and on-chain metrics, the firm’s base-case floor for the Bitcoin price is $40,000–$46,000 by late 2026. Polymarket assigns a 32% chance of BTC falling to $40,000, versus a 30% chance of reaching $90,000. The firm notes only 4 of 13 historical bottom indicators are currently triggered, so confirmation is incomplete.
On-chain context supports a “still oversold” setup rather than a clear trend reversal. BTC is down about 51% from its October 2025 peak and remains roughly 14% above its cost basis, with MVRV near 1.14. Galaxy cites lower risk of deeper capitulation than prior cycles, but also notes that aSOPR is near the 0.96 support area; a stronger bottom would require aSOPR to reclaim and hold above 1.0 and for short-term holder MVRV to move back through 1.0.
Galaxy also highlights a key risk: the cost basis can fall during sell-offs. If panic leads to a ~10%–30% drop in realized cost basis, the potential floor could shift lower toward roughly $36,000, $32,000, or $28,000. Spot Bitcoin ETF flows and corporate treasury demand may support the floor, but they may not cushion sharp stress if outflows or “buy strength” behavior emerges.
Overall, this frames the Bitcoin price outlook as fragile into late 2026 unless additional on-chain confirmation appears.
Bearish
Galaxy’s report is structurally bearish because it frames the current drawdown as an early/partial “bottoming zone” rather than a confirmed cycle bottom. Only 4 of 13 historical indicators have triggered, while several stronger capitulation/washout signals remain absent (e.g., price not breaking realized cost basis and broader holder loss-taking not reaching prior extremes). The probabilistic angle also matters: Polymarket’s downside is viewed as more credible than full upside recovery (32% to $40k vs 30% to $90k), with $45k risk even higher (40%).
In prior BTC cycles, bottoms typically formed closer to 12–13 months after the peak; the current drawdown is younger (~8 months), so time-based confirmation still isn’t mature. If on-chain conditions worsen—especially if the realized cost basis falls during panic selling—the downside “floor” could step down meaningfully (toward the high-$20k/low-$30k area), similar to historical moments when capitulation caused realized cost to reprice lower.
Short-term for traders: expect continued volatility and possible sell-pressure until aSOPR sustains above 1.0 and short-term holder MVRV clears 1.0. Long-term: ETF and treasury demand could soften extremes, but the report suggests they may not fully counter stress during drawdowns, keeping risk skew to the downside into late 2026.