Distribution Phase of Crypto Markets Explained
4. Distribution Phase
Characteristics:
• Prices start to stabilize or show signs of topping out.
• Sentiment remains bullish but starts showing signs of doubt.
• Large holders (whales) begin to sell off their positions.
Expectations:
• Increased volatility with sharp price movements in both directions.
• Public sentiment may start to wane, but optimism still persists.
• News of regulation or market saturation can trigger this phase.
Key Indicators:
• Price fails to make new highs and starts forming a plateau.
• Increased selling pressure from large accounts.
• Divergence in technical indicators (e.g., price rising while RSI falls).
• News of regulatory crackdowns or negative developments.
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