Definition ∞ Market cycle distribution is a phase in which a significant portion of a digital asset’s supply moves from strong, long-term holders to newer, often less experienced market participants. This transfer typically occurs near the peak of a market rally. It signifies a shift in ownership that can precede a price correction or a bear market.
Context ∞ Understanding market cycle distribution is fundamental for interpreting broad cryptocurrency market trends. On-chain data analysis often identifies this phase by tracking the movement of older coins to exchanges or new addresses. This period represents a critical juncture where the market’s underlying strength is tested, often leading to increased volatility as profit-taking accelerates.
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