Key Takeaways:
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Bitwise analysts argue that selling pressure has likely peaked and dips might be good buying opportunities.
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Smaller BTC holders are accumulating whilst miners increase their foreign exchange deposits.
The recent weakness in Bitcoin (BTC) price appears to have dampened enthusiasm as Google search interest within the asset fell to multi-month lows. Recent sentiment readings reflected the conditions typically seen during bearish periods when caution dominates overall crypto sentiment.
Cointelegraph reported that the Crypto Fear and Greed Index fell to a “fear” level of 24, its lowest level in a yr, a major decline from last week's “greed” reading of 71. This decline mirrored sentiment levels from April, when Bitcoin briefly fell below $74,000, and is consistent with previous cycles of market fatigue in 2018 and 2022.
Panic might be a chance in Bitcoin: Bitwise
Despite the sharp drop in sentiment, analysts at Bitwise imagine that the present situation favors accumulation quite than decline. Director and head of research André Dragosch, senior research associate Max Shannon and research analyst Ayush Tripathi said the recent correction was largely because of external aspects, including renewed trade tensions between the US and China, which triggered broad-based risk aversion in global markets.
Bitwise's weekly Crypto Market Compass report noted that the correction was compounded by a record wave of futures liquidations, with open interest in Bitcoin futures plunging by nearly $11 billion, “the sharpest decline on record.”
Dragosch said that this forced liquidation event has now “significantly exhausted the selling pressure,” setting the stage for a contrarian buying window just like the unwinding of the yen carry trade in August 2024.
Bitcoin price vs crypto sentiment index. Source: Bitwise
“Our proprietary Cryptoasset Sentiment Index has fallen to its lowest level since this era,” the analyst said, adding: “Historically, such extremes have marked favorable entry points ahead of seasonal strength within the fourth quarter.”
Smaller Bitcoin holders are increasing the pressure from miners
On-chain data supported this view. Glassnode reported that smaller Bitcoin holders within the 1 to 1,000 BTC range have increased their holdings in recent days, offsetting lower purchases by large holders. This pattern suggests that retail and mid-market investors are once more confident, whilst market volatility continues.
However, other indicators paint a more complex picture. Data from CryptoQuant showed that miners have deposited around 51,000 BTC (price over $5.7 billion) into exchanges since last Thursday, marking the biggest inflow since July. Such activity often precedes selling pressure, as miners typically move their holdings to exchanges to liquidate or hedge positions.
Similarly, long-term holders may exit their positions as data suggests 265,715 BTC were sold within the last 30 days, the biggest monthly outflow since January 2025.
Still, Bitcoin's stability across the $110,000 mark suggested that demand from institutions or ETFs could absorb the oversupply. Taken together, these opposing currents suggest that the market is moving from capitulation to reaccumulation, a situation that analysts at Bitwise see as laying the inspiration for a bullish fourth quarter.
This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision.
