Key takeaways:
According to Bitwise analysts, selling pressure seems to have peaked, making dips potentially attractive buying opportunities.
Smaller BTC holders are increasing their accumulation, even as miners elevate their exchange deposits.
Recent declines in Bitcoin (BTC) prices have seemingly lessened enthusiasm, with Google search interest for the asset dropping to a multimonth low. The latest sentiment metrics reflected conditions usually seen during bearish cycles, where caution prevails in the broader crypto climate.
Cointelegraph reported that the Crypto Fear and Greed Index has fallen to a “Fear” level of 24, the lowest in a year, sharply down from last week’s “Greed” reading of 71. This drop mirrored sentiment levels from April when Bitcoin briefly dipped below $74,000 and echoed previous market fatigue cycles in 2018 and 2022.
Panic as a potential opportunity in Bitcoin: Bitwise
Despite the significant sentiment decline, Bitwise analysts maintain that the current environment is conducive to accumulation rather than retreat. Director and head of research André Dragosch, senior research associate Max Shannon, and research analyst Ayush Tripathi noted that the recent correction was largely influenced by external factors, including renewed US–China trade tensions that generated widespread risk aversion across global markets.
Bitwise’s weekly crypto market compass report highlighted that the correction was exacerbated by an unprecedented wave of futures liquidations, with Bitcoin’s perpetual futures open interest declining by nearly $11 billion, marking “the strongest decline on record.”
Dragosch remarked that this forced liquidation event has now “meaningfully exhausted selling pressure,” paving the way for a contrarian buying opportunity reminiscent of the Yen carry trade unwind in August 2024.
“Our internal Cryptoasset Sentiment Index has dropped to its lowest since that period,” the analyst stated, adding, “Historically, such extremes have indicated favorable entry points ahead of seasonal strength in Q4.”
Related: Bitcoin retail interest is in ‘bear market’ as crypto sentiment flips to fear
Smaller Bitcoin holders step up amid miner pressures
Onchain data aligned with this perspective. Glassnode reported that smaller Bitcoin holders, those holding between 1 and 1,000 BTC, have ramped up their accumulation in recent days, countering decreased purchasing from larger holders. This behavior indicates renewed confidence from retail and mid-tier investors, despite ongoing market volatility.
However, other indicators paint a more nuanced picture. CryptoQuant data showed that since last Thursday, miners have deposited approximately 51,000 BTC (valued at over $5.7 billion) to exchanges, marking the largest inflow since July. This activity typically precedes sell-side pressure, as miners generally move holdings to exchanges to liquidate or hedge positions.
Likewise, long-term holders might also be parting with their assets, as data indicated that 265,715 BTC has been sold over the past 30 days, representing the biggest monthly outflow since January 2025.
Nonetheless, Bitcoin’s stability around the $110,000 mark suggests that institutional or ETF demand may be absorbing excess supply. Collectively, these conflicting flows indicate that the market is transitioning from capitulation to reaccumulation, a scenario that Bitwise analysts foresee as laying the groundwork for a bullish Q4.
Related: Bitcoin Coinbase Premium keeps BTC above $110K: Will this level hold?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
