Bitcoin is currently going through a prolonged distribution phase, as reported by Glassnode. This phase is characterized by a shift in market momentum and capital flows towards the negative side, indicating a decrease in demand.

The recent market structure analysis by Glassnode reveals that Bitcoin has entered a distribution phase post its all-time high. This phase is a part of Bitcoin's natural cyclical behavior, involving alternating periods of accumulation and distribution among different investor groups.

The distribution phase began in January 2025, coinciding with Bitcoin's significant correction from $108,000 to $93,000. Glassnode's Accumulation Trend Score remains below 0.1, indicating a focus on liquidating holdings rather than adding to them, potentially leading to continued downward pressure on the market.

The active distribution across all wallet size categories has intensified sell-side pressure on the market, particularly from coins being sold at a loss, which has further weakened market strength. Investor sentiment has become more cautious, with macroeconomic uncertainty affecting accumulation levels, especially after recent events like the Bybit hack and increasing US tariff tensions.

Despite this challenging environment, some positive signs have emerged. On-chain analyst Axel Adler noted a shift from high selling activity to lower levels of accumulation among long-term holders, suggesting a potential stabilization or upward movement in the market.

While Bitcoin's price has shown significant volatility, with a recent drop below $80,000 amid recession fears, it has managed a slight recovery to trade at $83,424 at the time of writing, showing modest gains of 2.0% over the last day.