Bitcoin Index Reveals Two Major Accumulation Waves and Five Distribution Phases This Cycle – Full Breakdown
Bitcoin's market rhythm reveals distinct patterns of accumulation and distribution—critical signals for savvy investors.
Pattern Recognition
The index clearly shows two significant accumulation waves where smart money entered positions, followed by five separate distribution phases where profits were taken. These cycles don't just reflect trader behavior—they expose market psychology in raw form.
Market Mechanics at Work
Each accumulation phase typically precedes major price appreciation, while distribution waves often signal local tops. The current cycle's structure suggests institutional players are playing a longer game than retail speculators.
Timing Versus Time
Successful crypto investing isn't about predicting exact tops and bottoms—it's about recognizing when the market's breathing changes rhythm. The real trick? Avoiding the classic finance trap of overanalyzing patterns while underappreciating liquidity.
Remember: charts show what happened, not what will happen. But ignoring these signals is like watching five exit doors close and still betting the fire won't spread.
Bitcoin Market Structure Points To Early Accumulation
According to top analyst Axel Adler, Bitcoin’s current cycle can be broken down into clear phases of accumulation and distribution. The index highlights two major accumulation points: the first in March 2023, when bitcoin traded around $22,000, and the second in August–September 2023, near the $29,000 level. These zones marked periods when long-term holders and new entrants quietly built positions before the next leg upward.
Following these accumulation phases, Adler identifies five distribution waves where profit-taking dominated: first between $34,000 and $44,000, then at $62,000, followed by $90,000, $109,000, and most recently at $118,000. Each wave represented a step higher in the market structure, but also a point where sellers gradually released supply back into the market.
Currently, CryptoQuant’s composite places Bitcoin at a Probability of 38% with a Min-Max of 31%, which he defines as the “repair zone.” This phase, also referred to as digestion or base formation, reflects early accumulation without yet confirming an upward reversal. In other words, while the groundwork for a new rally may be forming, conviction from buyers has not fully returned.
For investors, this repair zone carries important implications. Historically, such phases have preceded new bullish waves, offering opportunities for those willing to accumulate before momentum shifts. As Bitcoin consolidates below its highs, Adler suggests that the market may be quietly preparing for continuation — a reminder that consolidation often sets the stage for the next decisive move.
Testing Pivotal Level As Downtrend Extends
Bitcoin is trading around $109,800 after another sharp drop, reinforcing the selling pressure that has weighed on price action throughout August. The 4-hour chart highlights BTC’s continued struggle to regain momentum following repeated rejections NEAR the $123,000 resistance zone. Each attempt to push higher has been met with heavy supply, leaving the market to trend lower in a series of lower highs and lower lows.
Currently, BTC sits just above the $110,000 mark, a level acting as short-term support. However, the broader structure remains bearish, with price trading below the 50-day ($112,725), 100-day ($115,023), and 200-day ($115,831) moving averages. These technical levels now serve as overhead resistance, further complicating the path for bulls to stage a meaningful recovery.
If Bitcoin fails to hold the $110,000 support, the next downside target lies near $108,000, with a deeper correction potentially extending toward $106,000. Conversely, a bounce from current levels would require reclaiming $112,000 to ease immediate pressure, while a decisive move above $115,000 would be essential to shift momentum back in favor of buyers.
Featured image from Dall-E, chart from TradingView
