Price Action Analysis reveals Distribution Phase is going ON.
#Bitcoin selling by Big Whales after a significant bullish rally is termed the distribution phase and it marks the end of a bullish trend📈. After the end of
the distribution phase, the crypto downtrend 📉 starts.
The Game Behind Distribution?
After selling most of their #BTC holding in bull run, CRYPTO WHALES push the market into distribution phase where uptrend halts and market trades inside narrow price range. As the price reaches the upper boundary of the price range, selling pressure is increased which drags ⤵️ the price toward the lower boundary.
Here, they again wait for positive news to drive the price up during which they offload. When they have offloaded most of their holding, selling pressure is increased beyond a certain level which dumps the market through the bearish trend📉.
3 Sure Signs of the Distribution Phase:
Range bound price movement; The first sign of distribution is the price going into a sideways range bound after sufficient bullish rally.
Volume; Greater volume on bearish candlesticks. Despite that, the price is unable to break the lower boundary of the price range.
Candlestick Wicks penetrate the Upper Boundary of the Price range but close below the upper boundary.
The Case BTC:
BTCUSDT price action has clear signs of the distribution phase. After a significant bull run (from 16k to 53k), the price has moved inside a narrow range in the last few days.
Although Bitcoin price has tried to move outside this range but the selling pressure drags down. This is displayed in $BTC price chart in the form of Candlestick wicks outside this price range.
Another strong sign is the test of buying pressure according to Richard Wykoff. This
sign has also occurred in the BTCUSDT chart.
Why it is not Mid-Cycle Accumulation:
Because the buying volume is far lower. If it were an accumulation, high buying side volume should have been there on the chart.
End Note:
Bitcoin price has appreciated more than 2 times since the start of this Bull Run. At this stage, the euphoria of the bullish ride can override your rational thinking. The BTCUSD price chart reflects the end of the Bull Run. Trimming long-side Bitcoin positions seems a more realistic approach.
Happy trading! 😊
