Main takeaways:
Bitwise analysts suggest that selling pressure has likely reached its peak, and that price dips could present good buying opportunities.
Smaller BTC holders are accumulating despite increased exchange deposits from miners.
The recent decline in Bitcoin (BTC) prices seems to have curbed enthusiasm, as Google search interest for the asset has fallen to a multi-month low. Current sentiment readings reflect conditions typically associated with bearish market phases, where caution takes precedence in the crypto sentiment landscape.
Cointelegraph has reported that the Crypto Fear and Greed Index has dropped to a “Fear” level of 24, its lowest in a year, down significantly from last week’s “Greed” measure of 71. This downturn mirrors sentiment levels seen in April, when Bitcoin temporarily fell below $74,000, echoing previous market fatigue cycles in 2018 and 2022.
Panic in the market might be a chance to buy: Bitwise
Despite the significant drop in sentiment, Bitwise analysts assert that the current market conditions encourage accumulation rather than retreat. Director and head of research André Dragosch, senior research associate Max Shannon, and research analyst Ayush Tripathi indicated that recent corrections were mainly due to external factors, including renewed US–China trade tensions which caused broad risk aversion across global markets.
Bitwise’s weekly crypto market compass report noted that the correction was exacerbated by an unprecedented wave of futures liquidations, with Bitcoin’s perpetual futures open interest dropping by nearly $11 billion, marking “the strongest decline on record.”
Dragosch remarked that this forced liquidation event has now “significantly exhausted selling pressure,” setting up a buying window akin to the Yen carry trade unwind in August 2024.
“Our internal Cryptoasset Sentiment Index has reached its lowest recorded level during that period,” the analyst stated, adding, “Historically, such extremes have signaled favorable entry points ahead of seasonal strength in Q4.”
Related: Bitcoin retail interest is experiencing a ‘bear market’ as crypto sentiment shifts to fear
Smaller Bitcoin investors are active amidst miner activity
On-chain data bolsters this perspective. Glassnode reported that smaller Bitcoin holders, holding between 1 and 1,000 BTC, have increased their accumulation in recent days, counteracting decreased buying from larger holders. This trend suggests a resurgence of confidence from retail and mid-tier investors despite ongoing market volatility.
However, other indicators suggest a more intricate scenario. CryptoQuant data indicated that since last Thursday, miners have deposited approximately 51,000 BTC (valued at over $5.7 billion) onto exchanges, marking the largest inflow since July. Such movements typically herald sell-side pressure, as miners often transfer assets to exchanges for liquidation or hedging purposes.
Moreover, long-term holders might also be liquidating their positions, as data suggests that 265,715 BTC has been sold in the last 30 days, the largest monthly outflow since January 2025.
Nonetheless, Bitcoin’s stability around the $110,000 mark suggests that institutional or ETF demand may be absorbing the excess supply. Collectively, these contrasting flows indicate that the market is shifting from capitulation towards reaccumulation, which Bitwise analysts view as a foundation for a bullish Q4.
Related: Bitcoin Coinbase Premium maintains BTC above $110K: Can this level hold?
This article does not provide investment advice or recommendations. Every investment and trading action carries risk, and readers should conduct their own research before making decisions.
