Key Points
- Bitcoin’s price rise indicates significant growth, but it could be entering an early distribution phase.
- Retail and institutional investors continue to drive demand, despite potential future volatility.
Bitcoin has experienced a remarkable surge of over 129% in the past year, with its price now surpassing $100k. This has led many to suggest that it is in the final stages of its bull market.
However, some experts are beginning to caution that Bitcoin might be transitioning into the early distribution phase, which typically precedes a market cooling period.
Understanding Market Cycles
The Dow Theory provides a helpful framework for comprehending Bitcoin’s current market position. It divides market movements into two main phases: accumulation and distribution.
Bitcoin has historically followed this pattern. In 2022, it underwent a clear distribution phase, marked by a drop in prices following the previous year’s bull run.
By the start of 2023, Bitcoin had entered an accumulation phase, with investors looking to rebuild positions at lower prices. This phase lasted through 2024 and transitioned into the current early distribution phase in 2025.
The Role of Investors
A significant feature of the current market phase is the increased participation of retail investors. Despite Bitcoin reaching a six-figure milestone, retail involvement continues to grow, providing liquidity and driving market demand.
Institutional players also play a crucial role in shaping Bitcoin’s trajectory. For instance, MicroStrategy’s ongoing pro-cyclical purchase program is a clear example of this dynamic. In early 2025, the company added 10,107 bitcoins to its balance sheet, bringing its total holdings to 471,107 units.
Despite being in the distribution phase, Bitcoin’s current price structure suggests that there is still room for growth. Bitcoin’s Funding Rate remains relatively low, indicating that the market is not overly leveraged and can support further spot price discovery.
Bitcoin’s “fair price,” calculated through a power-law fit, is at $87.99K and acts as a significant support level. As long as prices stay above this level, the bull market remains intact.
Stable macroeconomic conditions could also present opportunities for further price increases before any inevitable correction.
