The defrost cycle is controlled by a defrost board, which monitors the temperature of the outdoor coil using sensors. When the coil's temperature drops below freezing for a set period, the defrost cycle is triggered. During this process, the outdoor fan stops to prevent cold air from interfering with the melting ice, and the system's auxiliary heat strips activate to maintain indoor warmth. Visible signs of a functioning defrost cycle include the outdoor fan stopping, steam rising from the unit, and a distinct 'whoosh' sound as the reversing valve shifts modes.