Crypto investors are becoming bearish as Bitcoin and Ethereum have struggled to maintain their recent gains, as indicated by various on-chain metrics.
Data from CryptoSlate reveals that Bitcoin has dropped almost 7% over the last week, trading at $113,479 at the time of writing. Ethereum has faced an even steeper decline, experiencing a 10% drop in the same period, now around $4,269.
This downturn is not confined to the two leading cryptocurrencies. Other top 10 digital currencies by market cap, including Solana, XRP, Dogecoin, and Cardano, have also recorded double-digit losses over the past week.
This sharp reversal represents a significant departure from the bullish sentiment that was prevalent among investors just weeks ago. The Crypto Fear & Greed Index has fallen to 52, its lowest point since June, according to Coinperps data.
Additional data from Santiment on Aug. 20 supports the weak market sentiment. The firm noted that social media sentiment around Bitcoin hit its lowest levels since June 22, when rising geopolitical tensions triggered panic selling.
It added:
“Retail traders have done a complete 180 after Bitcoin failed to rally and fell below $113,000.”
Meanwhile, the prevailing bearish sentiment seems to be affecting trading activities.
According to CoinGlass data, more than 50% of Bitcoin positions are currently short, indicating that most traders anticipate further price drops. In contrast, 48% of traders have held onto active long positions over the past 24 hours.
Prediction platforms like Polymarket show that crypto bettors increasingly assign a 60% chance for Bitcoin to fall to $111,000 or lower.
Crypto research site Kronos asserted that the market unease derives from worries over a potential interest rate cut by the Federal Reserve in September.
The firm stated:
“Powell’s Jackson Hole address remains the key potential pivot [for the crypto market]: dovish language could trigger a rebound, whereas hawkish tones might lead to deeper corrections.”
Notably, rate market indicators suggest a strong likelihood of easing, with the CME FedWatch data reflecting an 81% probability.
