Bitcoin Price May Drop to $56,000, Warns Galaxy Digital Head

TLDR

• Alex Thorn, Head of Research at Galaxy Digital, warns Bitcoin could drop to $56,000 in the coming weeks.
• Bitcoin experienced a 15% drop in late January, triggering over $2 billion in liquidations of long positions.
• The cryptocurrency’s price is now 38% below its all-time high, with 46% of the total Bitcoin supply in loss.
• Bitcoin has fallen below the 50-week moving average, and further declines could push it toward the 200-week moving average.
• Outflows from Bitcoin ETFs totaled $2.8 billion in the last two weeks, reflecting weakened confidence among institutional investors.

Bitcoin’s price has faced a tough market phase after its steep decline from last week’s high of $90,562. According to Alex Thorn, Head of Research at Galaxy Digital, Bitcoin may continue to slide, possibly reaching as low as $56,000 in the coming weeks. Thorn highlights several factors contributing to Bitcoin’s current market weakness, including recent sell-offs and ETF outflows.

Bitcoin Price Struggles After Steep Decline

Bitcoin’s recent performance shows clear signs of weakness. After experiencing a sharp 15% drop in late January, its price fell to approximately $74,551. This marked a significant decrease and nearly reached the low of April 2025, signaling market concerns.

Thorn also pointed out that this sudden price drop triggered over $2 billion in liquidations of long positions. This event highlights the immense pressure the cryptocurrency market is under. As Bitcoin fails to recover alongside traditional safe-haven assets like gold and silver, its status as a hedge against currency devaluation is in question.

Currently, Bitcoin is trading near $78,392, which is almost 38% below its all-time high of $126,296. On-chain data reveals that about 46% of Bitcoin’s supply is now in loss, with nearly half of all BTC holders at a loss compared to their purchase prices. Thorn pointed out that such market conditions often precede a bottom during previous bear markets.

The next critical levels for Bitcoin are its 50-week and 200-week moving averages. Bitcoin recently fell below the 50-week moving average, and in past market cycles, this has often been a signal for further declines. Thorn suggests that Bitcoin could slide toward its 200-week moving average, which is currently near $58,000. This level has historically been a strong support zone during prolonged market downturns.

ETF Outflows and Weakened Confidence in Bitcoin

Thorn also emphasized the outflows from Bitcoin ETFs, which have amounted to $2.8 billion in the last two weeks. These outflows reflect weakened confidence from institutional investors. Bitcoin ETFs, known for long-term holdings, typically act as a gauge for market sentiment, and these outflows suggest that institutional investors are becoming less confident in Bitcoin’s short-term prospects.

Another concerning sign is that Bitcoin’s price has fallen below the average purchase price of U.S. Bitcoin ETFs, which stands at around $84,000. According to Thorn, trading below this level is a negative signal for market sentiment, especially for long-term holders. As a result, Bitcoin may continue to face downward pressure unless demand picks up significantly.

Bitcoin’s price could face further declines toward the $56,000 to $58,000 range if current trends persist. With limited support between the $70,000 and $80,000 price range, Thorn’s analysis suggests that the cryptocurrency may test these long-term support levels in the near future.

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