Markets rarely flip cleanly from expansion to reversal.
They erode.
During late-stage expansion: • Displacement weakens
• Follow-through shrinks
• Breakouts require more effort
• Pullbacks deepen
Momentum still exists — but efficiency declines.
This is transition.
Retail traders continue trading expansion logic.
Professionals begin adjusting exposure.
A phase transition begins when: 1️⃣ Expansion fails repeatedly
2️⃣ Liquidity sweeps stop extending
3️⃣ Internal structure fractures
4️⃣ Acceptance shifts across timeframes
The crowd waits for confirmation.
Institutions respond to erosion.
Because by the time the reversal is obvious,
positioning has already shifted.
Transition is not dramatic.
It is structural decay.
Understanding this allows you to: • Reduce leverage before breakdown
• Stop chasing late expansion
• Anticipate volatility regime shift
Markets don’t collapse suddenly.
They deteriorate quietly — then resolve quickly.
Those who detect decay early
avoid being the liquidity for the next move.
That is phase awareness at institutional depth.