Is the Crypto Bull Cycle Approaching Its End?

The crypto market stands at a critical crossroads. After months of prosperity and record highs, the momentum has begun to fade, raising a fundamental question: Has the bull cycle that dominated the past year come to an end？

A Worrisome Resemblance to Previous Tops

Bitcoin leads the scene as usual, and its current price structure bears a striking resemblance to the "distribution" phase that preceded the 2021-2022 collapse. After a long uptrend, the price has begun to consolidate in a wide range, posting lower highs and rejecting key resistance levels.

This is typical behavior where "smart money" gradually sells its positions to optimistic "retail" investors. Superficially, the market appears stable and prices are high, but beneath the surface, the balance of power is shifting.

The Dividing Line: $107,000

A bearish shift has not yet been confirmed. The $107,000 level on the weekly timeframe represents the decisive line. A sustained close below it would confirm a major structural break and clearly signal a market transition from bullish control to a broad downtrend.

Momentum indicators support this weakness. The weekly Relative Strength Index (RSI) shows a classic "bearish divergence" (lower highs on the indicator despite the price making new highs), a pattern that typically precedes major corrections.

Risk Indicators: USDT Dominance and Ethereum's Weakness

The USDT Dominance (USDT.D) index has become one of the most prominent risk-gauging indicators. When it rises, it means investors are moving their funds into stablecoins, indicating a tilt towards caution and risk-off sentiment. The index appears to have completed a long accumulation and could rise to 6.8%. Historically, a rise in USDT dominance precedes major market corrections.

Meanwhile, Ethereum (ETH), a barometer for the altcoin market's health, is showing clear signs of exhaustion. After briefly breaking its previous high, it failed to maintain momentum and pulled back, in what is known as a "bull trap." Ethereum's weakness against Bitcoin is usually followed by a comprehensive pullback in other currencies like Solana, XRP, and Avalanche, which are already starting to lose their momentum.

Pressuring Factors and Fading Optimism

Macroeconomic factors are combining to increase pressure. Rising bond yields, central banks tightening global liquidity, and persistent inflation all make an environment of sustained rallies more difficult. ETF flows, which were a primary driver of the rally, have also slowed, signaling a decline in institutional demand.

Psychologically, the current mood resembles late 2021: excessive optimism in the media, while on-chain data shows declining transaction volumes and fewer new wallets.

Conclusion: Caution is Warranted

The market is at a decisive moment. Bitcoin's price structure, the rise of USDT.D, and Ethereum's weakness are all strong early signals of entry into a distribution phase.

The coming weeks will determine the path. Bitcoin's ability to stay above $107,000 is the decider between a healthy correction and the start of a new bear cycle. Until the picture becomes clear, the evidence suggests the euphoria phase is over, and traders must manage risk with extreme caution.