Distribution
A period where large holders are quietly selling into strength — a potential precursor to a downtrend.
Distribution is the Wyckoff phase opposite to accumulation. Smart money sells (distributes) existing positions to retail buyers who are attracted by strong recent price action. Price stalls near highs in a range, with elevated volume on down-days suggesting supply is overwhelming demand.
Telltale signs of distribution:
- Multiple tests of a resistance zone that fail to break cleanly.
- Volume expands on red days and contracts on green days within the range.
- Divergence on momentum oscillators at the highs.