The world of finance can be like a rollercoaster ride, with prices going up and down. The distribution phase is a term used in technical analysis to describe a period after a significant price increase. Imagine the rollercoaster reaching the top of the hill – the distribution phase is like the period when it starts to level out or even go down a bit.
Here are some characteristics of a distribution phase:
Sideways Movement: The price of an asset may trade sideways, meaning it doesn't show a clear upward or downward trend.
Range-Bound: The price may fluctuate within a certain price range.
Profit-Taking: Some investors may choose to sell their holdings during this phase to lock in profits from the previous price increase.
The distribution phase doesn't necessarily mean that the price will plummet. It's just a signal that the upward trend might be taking a break.
