Bitcoin’s Wyckoff Distribution Phase: Is This Altcoin Season’s Golden Ticket?

Crypto markets hold their breath as Bitcoin flashes classic Wyckoff distribution signals—while ETH, SOL, and other alts start flexing in the shadows.

When the king stumbles, the courtiers feast

Traders are rotating out of BTC like hedge funders dodging SEC subpoenas—except here, the 'compliance' is chasing greener pastures. Ethereum's gas fees just dipped below $1.50 (a miracle!), Solana's memecoin casino stays packed, and even ADA's building... something. Always building.

The cynical take? This might just be another 'narrative cycle' where VCs pump their bags before dumping on retail. But the charts don't lie: BTC dominance slipping below 45% while alt volume spikes tells the real story.

Buckle up. The next 90 days could make or break more portfolios than a leveraged Trump NFT.

Wyckoff Pattern Reveals Imminent Breakdown

In an August 2 post on the social media platform X, crypto analyst Joao Wedson explained how the Bitcoin price may be at risk of a downturn over the coming months. The analyst based his conclusion on the Wyckoff Distribution model, a technical analysis framework that describes how smart money sells off assets at the top of a market cycle.

Wedson highlighted in the post that a 13-phase schematic is unfolding in real-time, which signals that the institutional investors (known as “smart money”) are preparing to exit the market, even as the retail traders remain hopeful.

The analyst started his breakdown with the Preliminary Supply (PSY) phase, where there are subtle signs of institutional sales, and a Buying Climax, where price hits a peak due to exhausted demand. This phase is then followed by an Automatic Reaction (AR), a sharp drop in Bitcoin’s price, defining the bottom of the distribution range.

The fourth and fifth phases are Secondary Tests (ST), where price retests the highs of the distribution range, but with weaker momentum and volume. As the pattern matures, the price enters Phase B with sideways movement, confusing retail participants as the institutions quietly offload their coins.

The most irrefutable signs appear in phases C and D, where there is first a Sign of Weakness (SOW), often characterized by a strong breakdown with volume; this is a major signal of demand fading. Then, there is a Last Point of Supply (LPSY), a weak rally towards the upside, which typically creates good setups for shorts. 

Finally, still within phases C and D, a break of ICE leads to a deeper fall, after which a second LPSY trap follows to seal the distribution. 

Is The Altcoin Rally Underway?

Going further, Wedson pointed out that the market makers are rotating into altcoins. According to the analyst, altcoins are already exiting their accumulation zones and are being positioned for structural markups, reflecting increasing interest in the altcoin market.

In contrast, bitcoin has entered a weekly distribution phase, which may reflect as a weak or modest performance in the near term. Wedson added that, by the end of 2025, there will be a full rotation from BTC to altcoins, and then finally to fiat.

As of this writing, Bitcoin is valued at about $113,439, reflecting no significant movement in the past 24 hours.