Bitcoin Distribution Ends: Mid-Cycle Pause or Start of Long Bear Market?

Bitcoin has faced persistent selling pressure since October, when the price retreated sharply after reaching a high near $125,000. Within a few weeks, the market dropped to the $60,000 region, which caused a broad shift in sentiment from late-cycle optimism to defensiveness. Although volatility is common after strong rallies, the speed of this correction has fueled concerns that the market may be turning into a deeper cyclical decline than a short consolidation phase.

According to senior analyst Axel Adler, on-chain data supports this explanation. The Entity-Adjusted Liveliness metric – which tracks a coin’s long-term performance relative to its holdings – peaked at around 0.02676 in December 2025, about two months after the price’s ATH. This delay is typical for cumulative on-chain indicators. Since then, the metric has started to trend downwards, historically a sign that distribution phases end and periods of accumulation begin.

Previous cycles show that similar declines in life are often preceded by extended accumulation phases lasting about 1.1 to 2.5 years. If the pattern persists, the current market position may indicate an early stage of a correction rather than an imminent recovery. Investors are therefore closely watching both price action and on-chain signals to assess whether stability or further downside risk is ahead.

Adler also notes that success quickly increased after Bitcoin’s peak and has begun to trend downward, a pattern historically associated with the transition from distribution to accumulation. In this context, the main question is no longer whether the bear phase has started, but rather its depth and length. Adjusted Business Life – which measures the ratio of days of coins spent to days of coins created while filtering out internal business transfers – provides insight into long-term owner behavior and circulation across the network.

Although Bitcoin reached about $125,000 in October 2025, the live continued to rise for two more months, reaching a high of 0.02676 in December, which is a typical mark of cumulative on-chain metrics. As of mid-February 2026, the index has fallen to around 0.02669, already below both its 30-day and 90-day moving averages, which now serve as upper resistance. This setting historically reflects a decline in spending activity among long-term holders.

Previous cycles show comparable properties. The accumulation phases starting in 2020 lasted about 1.1 years, while the period 2022–2024 extended about 2.5 years. If this pattern repeats, the accumulation may continue until late 2026 or mid-2027. Confirmation may require the 90-day moving average to cross below the 365-day trend, indicating a fully established structural change.

Bitcoin Weekly Structure Shows Continued Downtrend Pressure

The weekly chart of Bitcoin shows a clear structural shift from the expansion of the recent cycle to the correction phase, and the price is currently consolidating near the $67,000 area after a significant decline from the ~$125,000 peak. A break below the medium-term moving averages confirms weak momentum, while repeated failures to recapture the $90,000–$100,000 region reinforce a transition to bearish territory rather than a simple pullback.

Technically, the most notable development is the loss of the green moving average, which served as strong support throughout the 2024-2025 uptrend. Bitcoin is now trading below that level, while the long-term red moving average near the $50,000 midpoint represents the next structural support. Historically, stable trades below the average often precede extended consolidation or deep corrections.

The strength of the volume also raises caution. The spike associated with the recent selloff reflects tight distribution rather than systematic profit taking. However, the next level of volume may mean that panic sales have subsided, at least temporarily.

If Bitcoin stabilizes above $60,000, a range formation is still felt. A decisive split below that level could increase the downside risk to long-term cost base support. Conversely, a replacement in the area of ​​$80,000–$90,000 would be required to significantly improve the overall appearance of the technology.

Featured image from ChatGPT, chart from TradingView.com

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