Distribution Exhaustion

Definition ∞ Distribution exhaustion describes a market condition where selling pressure from current holders of an asset has significantly diminished, indicating a potential end to a downward price trend. This state suggests that most participants who intended to sell have already done so. It often precedes a period of price stabilization or a reversal to an upward trend. This concept is typically observed through on-chain analytics or trading volume patterns.
Context ∞ Crypto market analysts frequently discuss distribution exhaustion in news reports when evaluating potential price bottoms for digital assets. Identifying this condition helps traders and investors anticipate shifts in market momentum. A clear signal of distribution exhaustion can precede a period of accumulation and subsequent price recovery, influencing market strategies.