Bitcoin dips to $113,000, weighing on the broader crypto market and pushing retail sentiment to its lowest level in weeks.
At the time of reporting, BTC is trading at $113,646, down 1.2% over the past 24 hours, 5% over the week, and 4% over the past month. The decline leaves Bitcoin 8.5% below its all-time high of $124,128, reached on August 14. Investor sentiment has reflected the pullback, with the Fear & Greed Index dropping 12 points in a single day—from 56 to 44—returning to “Fear” territory.
Derivatives activity showed a mixed picture. Twenty-four-hour trading volume increased 6.23% to $83.7 billion, while open interest fell 0.77% to $80.36 billion, according to Coinglass. The combination of rising volume and declining open interest typically signals short-term position adjustments rather than new bets, suggesting traders are reducing risk amid growing volatility.
Retail sentiment turns bearish as Bitcoin whales continue to accumulate
An August 20 update from Santiment shows retail traders have reached their most bearish sentiment since June 22, when fears of war sparked widespread selling. Analysts note that, historically, such extreme pessimism among retail investors often precedes market recoveries.
Unlike retail traders, large holders remain active. Santiment reported on August 19 that wallets holding between 10 and 10,000 BTC added 20,061 coins since mid-August and have accumulated a total of 225,320 BTC since March. Historically, Santiment notes, the activity of these wallets has closely mirrored Bitcoin’s future price movements over the past five years.
Glassnode signals fragile market conditions
Glassnode’s August 19 market pulse report highlighted Bitcoin’s sharp retracement from its rally above $123,000 toward the $114,000 support zone. With the relative strength index cooling and the cumulative volume delta turning negative, momentum in the spot market has weakened. Sellers dominated the order books, despite a brief uptick in trading volumes.
Futures markets also showed signs of softening. Open interest reached very high levels prior to a wave of deleveraging, while funding rates indicate traders are still paying to maintain long positions despite declining confidence. Options activity surged, with rising open interest and volatility spreads, as well as a positive 25-delta skew, pointing to increased demand for downside protection.
Institutional flows remain a stabilizing factor. Over $880 million flowed into Bitcoin ETFs last week, signaling strong demand despite ongoing volatility. While entity-adjusted transfer volume increased, on-chain user activity and fees declined, suggesting significant capital movement amid the drawdown.
Glassnode noted that 96% of Bitcoin supply is still in profit, and the realized P/L ratio sits at 2.4, indicating high profitability levels that warrant caution but are not yet at overheating levels. According to the report, Bitcoin’s near-term trajectory will depend on whether the decline extends into deeper consolidation or if ETF demand and whale accumulation can offset weakening spot-market signals.
