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Bitcoin Enters Distribution Phase – Bull Market Outlook

Bitcoin price

Bitcoin has had an impressive year, surging over 129% and crossing the $100,000 mark. This dramatic price increase has raised the question of whether Bitcoin is nearing the peak of its current bull market. Some analysts warn that the cryptocurrency may be entering the early stages of a distribution phase, a typical precursor to a market cooling period. However, other signs suggest there could still be room for growth before any correction takes place.

Understanding Market Cycles: The Dow Theory Framework

To understand where Bitcoin stands in its market cycle, we can turn to Dow Theory. This method divides market movements into two main phases: accumulation and distribution. Bitcoin has historically followed this pattern, making these phases an essential part of analyzing its price behavior.

In 2022, Bitcoin entered a distribution phase, marked by a price decline after an earlier bull run. This was followed by an accumulation phase in 2023 and 2024, where investors bought Bitcoin at lower levels to rebuild positions. As 2025 progresses, many analysts believe Bitcoin is transitioning into another distribution phase.

According to Dow Theory, this shift is often signaled by changes in volume and price structure, and current market indicators seem to be aligning with these patterns. The attached Bitcoin price and volume chart reveals the cyclical movements of accumulation and distribution over the past few years, underscoring the current shift.

The Role of Retail and Institutional Investors

One of the key features of Bitcoin’s current market phase is the significant involvement of both retail and institutional investors. Despite Bitcoin reaching the six-figure mark, retail participation is on the rise. Retail investors are providing essential liquidity and driving demand, contributing to Bitcoin’s continued price surge.

At the same time, institutional players remain influential in shaping Bitcoin’s price trajectory. MicroStrategy, for instance, continues to add to its Bitcoin holdings, reinforcing confidence in the cryptocurrency’s long-term potential. In early 2025, the company purchased an additional 10,107 Bitcoins, bringing its total holdings to 471,107 units. Such pro-cyclical purchases signal that institutional players are optimistic about Bitcoin’s future, which may positively impact overall market sentiment.

Bitcoin’s Price Structure and Potential for Further Growth

Although Bitcoin appears to be entering a distribution phase, its current price structure does not suggest that the market is overheating. According to several analysts, there is still room for growth in the current bull market. Ki Young Ju, a well-known crypto analyst, notes that Bitcoin’s funding rate remains relatively low, similar to levels seen in the summer of 2024. This indicates that the market is not overly leveraged, and there is still potential for further spot price discovery.

Furthermore, Bitcoin’s “fair price,” as calculated using a power-law fit, sits at around $87.99K. This price level is viewed as an important support threshold. As long as Bitcoin remains above this support level, the bull market could continue, even as the cryptocurrency approaches the late stages of its rally.

External Factors That Could Impact Bitcoin’s Price

Several factors could still influence Bitcoin’s price trajectory, including broader macroeconomic conditions and global events. Stable macroeconomic factors, such as low inflation or favorable interest rates, could create additional opportunities for price increases. Analysts also point to the potential impact of high-profile events, such as international promotional efforts, which could extend the current bull run for a few more quarters.

While there are some concerns about the market entering a cooling phase, the ongoing involvement of retail and institutional investors, combined with technical indicators suggesting room for growth, provides optimism for Bitcoin’s continued momentum.

Conclusion: Will Bitcoin Continue Its Bull Run?

Bitcoin’s price surge has been remarkable, but the recent shift into a potential distribution phase raises questions about its future. While some experts predict an impending market correction, others argue that the market may still have room to run before it peaks. Retail and institutional interest remains strong, and key price support levels suggest that Bitcoin’s bull market could continue for some time.

Investors and traders will need to keep a close eye on key price levels, market sentiment, and external economic factors to determine whether Bitcoin’s current cycle is nearing its end or if there is still more growth ahead. The cryptocurrency market is known for its volatility, but Bitcoin’s strong fundamentals and institutional backing provide a solid foundation for the possibility of continued growth.

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Maheen Hernandez

A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5

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