Entering 2026, the market phase Bitcoin is in differs from the rebounds seen in the early stages of previous cycles. Although recent signs of technical repair have emerged, allowing for a tactically more positive stance, the structural signals still do not fully support the conditions for a sustained bull market. Historical experience shows that once the price falls below the one-year moving average, it often enters a more challenging trading range. Coupled with weakening incremental capital and slowing fund inflows, this cycle is more likely to enter a market environment that requires selective opportunities and emphasizes trading discipline.
Super Whale Selling Continues: Orderly Distribution but Pointing to a High Range
On-chain data indicates that long-term holders are still continuously and orderly distributing their holdings. After the launch of the Bitcoin spot ETF in early 2024, "super whales" initially increased their buying during the early-year pullback. However, starting in October 2024, their behavior shifted significantly from "accumulation" to "distribution." On a cumulative basis, this group has since sold approximately $61 billion worth of Bitcoin and has remained in a net selling state over the past 30 days.
This selling pressure has largely been absorbed by medium-sized whale groups, causing the price to exhibit more as repeated back-and-forth within a high range rather than a typical accelerated peak or panic-driven sell-off. Unlike the indiscriminate selling seen after the peak in spring 2021, this round of distribution is more orderly and aligns more closely with the behavior of mature capital in the later stages of a cycle, indicating that Bitcoin is at least within a cyclical top range.
Weak Incremental Capital: Price Near TMMP, Upside Momentum Limited
From a capital perspective, the core constraint of this cycle remains the lack of incremental funds. The 30-day net increase in Bitcoin's realized capitalization has continued to decline since its peak in late 2024. Although the price rebounded multiple times in 2025, the funding side had already weakened first. This divergence explains why previous rallies were difficult to sustain and also means that the current rebound is built on a relatively weak capital foundation.
At the same time, the growth of new addresses has slowed, indicating that the market has not yet attracted a significant number of new investors, and broad retail participation has not materialized. The current price of Bitcoin is close to the True Market Mean Price (TMMP), meaning that incremental buyers' willingness to chase prices is not strong. Historically, sustained rallies often require the price to move significantly away from the TMMP, accompanied by synchronized confirmation of capital inflows. If capital flows fail to keep up, the price is more likely to oscillate near the TMMP rather than continue to rise and open up further upside.
Overall, although technical repairs allow for a tactically more positive stance, this round of upward movement should be viewed more as a tactical rebound rather than the start of a new structural uptrend cycle. Bitcoin still faces core constraints such as insufficient incremental capital inflows and continued selling by super whales, and the upside is likely to remain limited. In such an environment, market movements are more likely to present staged, trading-oriented opportunities rather than smooth trend extensions. Compared to previous cycles, this round has seen fewer new participants. Whether the market can sustain a rebound depends not on "how many people" but on "how much new capital." In the context of insufficient capital strength, risk management and discipline should still take precedence over long-term buy-and-hold strategies.
The above views are partly from Matrix on Target. Contact us to get the full Matrix on Target report.
Disclaimer: The market is risky, and investment requires caution. This article does not constitute investment advice. Digital asset trading can be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
