Entering 2026, the market phase for Bitcoin is different from the early rebound of previous cycles. Although there have been recent signs of technical recovery and a moderate shift towards a more positive tactical stance, the structural signals indicate that the conditions supporting a sustained bull market are still insufficient. Historical experience shows that once the price falls below the one-year moving average, it often enters a more challenging operational range. Coupled with weakening incremental funds and slowing capital inflows, this cycle is more likely to enter a market environment that requires selective opportunities and emphasizes trading discipline.
Super Whales' Reduction Continues: Chip Distribution is Orderly but Points to High-Range Areas
On-chain data indicates that long-term holders are still continuously and orderly distributing their chips. After the launch of the Bitcoin spot ETF in early 2024, "super whales" increased their buying intensity during the initial pullback phase, but since October 2024, their behavior has clearly shifted from "accumulation" to "reduction." Cumulatively, this group has sold approximately $61 billion worth of Bitcoin since then, and they have maintained a net selling state in the last 30 days.
This selling pressure has largely been absorbed by medium-sized whale groups, resulting in price movements that are more characterized by repeated tug-of-war within a high-range area, rather than typical accelerated peaks or panic sell-offs. Unlike the indiscriminate selling seen after the peak in spring 2021, this round of reduction is more orderly and aligns better with the behavioral characteristics of mature capital in the later stages of a cycle, indicating that Bitcoin is at least in a cyclical top range.
Weak Incremental Funds: Price Close to TMMP, Upward Momentum Limited
From a funding perspective, the core constraint of this cycle remains insufficient incremental funds. The net increase in Bitcoin's realized market cap has continued to decline since peaking at the end of 2024. Although the price has rebounded multiple times in 2025, the funding situation has weakened in advance. This divergence explains why the previous rise was difficult to sustain and indicates that the current rebound is still built on a weak funding foundation.
At the same time, the growth of new addresses has slowed, showing that the market has not yet attracted a significant number of new investors, and widespread retail participation has not yet formed. Bitcoin's price is currently close to the True Market Mean Price (TMMP), indicating that the willingness of incremental buyers to chase prices is not strong. Historically, sustained price increases often require prices to be significantly distanced from TMMP, accompanied by confirmed capital inflows; if the funding does not keep up, prices are more likely to oscillate back near TMMP rather than continue to rise and open up upward space.
Overall, although the technical recovery allows for a relatively positive tactical stance, this round of upward movement should be viewed as a tactical rebound rather than the starting point of a new structural rising cycle. Bitcoin still faces core constraints such as insufficient incremental capital inflows and continued reductions by super whales, making upward space likely limited. In such an environment, the market is more likely to focus on phase-based, trading-oriented opportunities rather than smooth trend extensions. Compared to previous cycles, there are fewer new participants this time; whether the market can achieve a sustained rebound depends not on "how many people" are involved, but on "how much new capital" is present. In the context of insufficient funding strength, risk management and discipline should still take precedence over long-term holding strategies that are solely focused on one-sided bullish positions.
The above views are partly derived from Matrix on Target, Contact Us_ to obtain the complete report from Matrix on Target._
Disclaimer: The market has risks, and investment should be cautious. This article does not constitute investment advice. Trading in digital assets may carry significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.
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