Is the Crypto Bull Market Entering Late-Stage Distribution?

The crypto market's current dynamics suggest a fragile equilibrium, with on-chain metrics and buying pressure indicators painting a picture of a bull market in late-stage distribution. Bitcoin's price action, constrained by overhead supply and eroding investor optimism, reflects structural weaknesses that could signal an impending correction. This analysis synthesizes recent on-chain data and behavioral trends to assess whether the market is nearing a critical inflection point.

On-Chain Metrics: A Fractured Market Structure

Bitcoin's price has remained trapped in a narrow range between $85.6k and $93k since late 2025, with repeated failures to break above the 0.75 quantile (~$95k) and the Short-Term Holder (STH) cost basis of $101.5k. This stagnation is compounded by a dense supply cluster in the $93k–$120k range, which acts as a gravitational anchor suppressing upside momentum according to on-chain data. The Accumulation Trend Score, a proxy for sustained buyer dominance, has hovered near 0.1-a level historically associated with prolonged sell-side pressure.

The STH-Spent Output Profit Ratio (SOPR) has also fallen below 1, indicating that short-term holders are selling at a loss. This panic-driven behavior is further amplified by the 30D-SMA Entity-Adjusted Realized Loss, which hit $555 million per day in late 2025-the highest level since the FTX collapse. Meanwhile, the Relative Unrealized Loss metric has surged to 4.4%, the highest in nearly two years, underscoring widespread investor distress.

The MVRV (Market Value to Realized Value) ratio, a critical gauge of investor profitability, provides additional context. While the ratio found support near its 365-day moving average in Q3 2024, recent trends suggest a divergence between price and realized value. Values above 3.2 historically signal euphoria and cycle tops, while readings below 0.8 indicate capitulation according to market analysis. With Bitcoin's supply in loss reaching 6.7 million BTC (7D-SMA)-a level last seen during prior bearish transitions-the market appears to be teetering on the edge of a capitulation phase as reported by on-chain data.

Buying Pressure: A Deteriorating Demand Narrative

Chainalysis buying pressure metrics reinforce the case for late-stage distribution. Slowing BTC buying pressure, declining futures buying volume, and weak on-chain OTC activity mirror patterns observed during the 2021 bull market peak. Institutional players, in particular, seem to be reducing exposure, as evidenced by subdued open interest and neutral funding rates in futures markets.

Active address counts, a proxy for network participation, have also trended lower, signaling reduced retail engagement. This divergence between price action and volume-a hallmark of distribution phases-suggests that early investors are locking in profits while latecomers face mounting losses according to market analysis. The True Market Mean at $81.3k now serves as a critical support level; a break below this threshold could trigger a cascade of liquidations, further accelerating the sell-off as reported by on-chain data.

Historical Parallels and Structural Risks

The current market environment bears striking similarities to the 2020–2023 cycle. During that period, the MVRV ratio recorded a lower peak in late 2021 despite higher all-time highs, signaling increased distribution. A similar negative divergence is emerging in 2025, with Bitcoin's price failing to outperform its realized value. This pattern suggests a market where optimism is increasingly disconnected from fundamentals, a precursor to sharp corrections.

Moreover, the absence of speculative conviction-evidenced by declining open interest and neutral funding rates-highlights a lack of conviction among traders according to on-chain data. In contrast to prior cycles, where macroeconomic tailwinds (e.g., Fed easing) provided a buffer, the current environment is marked by thin spot liquidity and heightened sensitivity to macro shocks as reported by market analysis. This fragility increases the risk of a self-fulfilling selloff, particularly if Bitcoin fails to reclaim key psychological thresholds.

Conclusion: A Market on the Precipice

The confluence of weak buying pressure, eroding on-chain metrics, and historical parallels strongly suggests that the crypto bull market is entering a late-stage distribution phase. While Bitcoin's price remains anchored near $85k–$93k, the structural headwinds-overhead supply, loss realization, and declining participation-pose significant risks. Investors should remain cautious, particularly as the True Market Mean and STH cost basis act as critical guardrails. A breakdown below $81.3k could catalyze a broader capitulation, expanding the cohort of loss sellers and deepening the correction. In such an environment, defensive positioning and liquidity preservation may be prudent strategies.