Recently, many beginners in the group have been asking how to determine whether the main force is just shaking out the weak hands or actually preparing to distribute. This is indeed a common pitfall. I myself took quite some time to figure it out, and today I want to share four core indicators with everyone.

First, look at the distribution of chips; this is the most easily overlooked but also the most critical signal. During shakeouts, the main force usually quietly accumulates chips at the bottom, like their ammunition depot, which won't move in the short term. Conversely, once the chips start to loosen at the top and the distribution gradually spreads out, it’s basically a sign of distribution. My experience is, the more concentrated and stable the chip distribution, the more it indicates the main force is still building strength.

Next, observe the trading volume. This is the most straightforward. During shakeouts, trading volume usually shrinks, as the main force tries to scare retail investors into selling with small fluctuations, but the trading activity isn’t actually high. Distribution is completely different; trading volume will significantly increase because the main force is continuously unloading chips. Recently, BTC’s 24-hour trading volume has been around five billion USD. At this level, distinguishing between shakeout and distribution becomes even more important.

Time-based price movements can also reveal clues. During shakeouts, the intraday chart will be very volatile, with sharp rises and falls, aiming to shake out the indecisive. But during distribution, the main force will make the trend relatively stable, trying to let chips quietly slide out without causing too much disturbance. This contrast is quite interesting.

Finally, look at the position of the price. If it has risen about 30% from the bottom, the main force usually starts shakeouts, which can both clear out floating chips and preserve room for further gains. But if the increase has already exceeded 60%, then a large volume at high levels is basically a sign of distribution, and the risk is much higher.

The overall logic of shakeouts is to scare you first and then pull you in; distribution, on the other hand, is to stabilize you first and then quietly exit. By mastering these four indicators, you can roughly judge the market’s true direction and avoid getting trapped. The most important thing is to observe the market more and keep records; over time, this sense will naturally develop.