The air around Bitcoin feels a little thinner these days, almost like a high-altitude climb after a long sprint. Just this week, the price dipped below $100,000. This move prompted Galaxy Digital, a firm many in our space watch closely, to adjust its outlook for the year ahead.
- Galaxy Digital has lowered its 2025 year-end price target for Bitcoin to $120,000, citing a new “maturity era” for the cryptocurrency. This phase is characterized by increased institutional involvement and reduced volatility.
- Significant “whale distribution” and a decrease in retail participation have been observed, while ETFs absorb some of this supply. The market is currently seen as fragile due to ETF outflows, thinning liquidity, and long-term holders selling.
- Capital is also rotating towards other investment narratives like artificial intelligence (AI) and gold, which are capturing investor attention and potentially diverting funds that might otherwise go to Bitcoin.
They’ve trimmed their 2025 year-end price target for Bitcoin. It now sits at $120,000, a notable step down from their earlier projection of $185,000. The reason? Researchers there suggest Bitcoin has entered what they call a “maturity era.”
This new phase, they explain, is marked by a stronger presence of institutional money and, perhaps surprisingly, less volatility. It’s a sign of growth, certainly, but also a shift in how the market behaves.
Alex Thorn, Galaxy’s head of research, shared some interesting observations. He noted that while Bitcoin’s long-term case remains structurally sound, this year has seen a lot of “whale distribution.” That’s when the big holders, the ones with vast amounts of Bitcoin, sell off their holdings.
At the same time, exchange-traded funds (ETFs) have been absorbing some of this supply. Retail participation, however, seems to be fading a bit. It’s a complex dance between different types of investors.
Thorn suggests that if Bitcoin can hold that $100,000 level, the nearly three-year bull market will stay intact. But, he cautions, the speed of future gains might just slow down. We might be in for a steadier, if less dramatic, ride.
This downgrade from Galaxy follows one of Bitcoin’s sharpest pullbacks this year. We saw more than $1.3 billion in leveraged positions (bets made with borrowed money) get liquidated. This happened when the price tumbled from roughly $107,000 to below $99,000 on Tuesday.
Bitcoin has since found its footing a little, trading just above $103,400 on Wednesday, according to The Block’s price page. Still, analysts told The Block that the market feels “fragile.”
Several factors contribute to this sentiment. There are ETF outflows, meaning investors are pulling money out of Bitcoin funds. Liquidity, the ease with which an asset can be bought or sold without affecting its price, is also thinning. And long-term holders are distributing their Bitcoin, adding to the selling pressure.
Galaxy pointed to an unprecedented redistribution from these long-term wallets. We’re talking about 470,000 Bitcoin, a sum worth roughly $50 billion. Early holders have been selling into this new institutional demand. It’s a clear sign of Bitcoin’s “institutionalization,” but it also creates persistent resistance around key price levels.
Where the Money Is Going
Beyond these structural changes within the Bitcoin market, Galaxy also highlighted another key factor: capital is rotating elsewhere. Think of it like a crowd at a fair. Everyone is excited about one ride, then another, then another.
Right now, other investment narratives are capturing attention. Two big ones stand out: artificial intelligence (AI) and gold. It seems investors have a finite amount of attention, and Bitcoin isn’t always at the top of the list.
The AI buildout, particularly the “hyperscaler boom” and the demand for data centers, has attracted record inflows. Investors are chasing that data-center trade, seeing huge growth potential there. It’s hard to argue with the excitement around AI right now.
Then there’s gold. The metal has seen a resurgence as a geopolitical hedge. In uncertain times, gold often shines as a safe haven. This demand, Galaxy suggests, might otherwise have flowed into Bitcoin.
Thorn put it plainly: in a liquidity-rich environment, “attention is finite.” He believes 2025 simply wasn’t Bitcoin’s “hot trade” year. It couldn’t compete with the buzz around AI or the so-called Magnificent Seven equities (a group of large, influential tech stocks).
Adding to the cautious mood is the memory of the October 10 “leverage wipeout.” That event erased 35% of crypto futures open interest. It’s the kind of market shock that makes investors think twice before jumping back in with both feet.
Vetle Lunde of K33 Research echoed some of these concerns. He noted that “fear-driven sentiment and heavy selling from long-term holders have compounded the weakness.” He described Bitcoin’s current phase as a “crucial inflection point” following that crash.
However, Lunde also sees a silver lining. He expects selling pressure to ease. He believes “conditions aligning for a potential bullish reversal once risk appetite returns.” It’s a wait-and-see game for many.
The Road Ahead: Support or Slide?
Not everyone shares Lunde’s cautious optimism. Onchain analytics firm CryptoQuant offered a starker view. Julio Moreno, their head of research, warned that Bitcoin could fall further.
He suggested a drop to around $72,000 within one to two months is possible. This scenario plays out if Bitcoin fails to hold the $100,000 support level. It’s a critical line in the sand for many market watchers.
Moreno cited “contracting spot demand” as a key reason for his outlook. This means fewer people are buying Bitcoin directly on exchanges. He also pointed to “negative ETF flows” since the October liquidation event, indicating money leaving those investment vehicles.
So, what are we to make of all this? Bitcoin, it seems, is growing up. It’s attracting serious institutional players, which brings stability but perhaps less explosive growth. It’s also competing for investor dollars with other compelling stories, like AI’s rapid ascent and gold’s enduring appeal.
The market is at a crossroads. Will Bitcoin solidify its new, more mature footing above $100,000? Or will the current pressures push it to test lower levels? The coming weeks will tell us much about this evolving landscape.
