Retail crypto traders appear to have turned sharply bearish after Bitcoin struggled to recover from a recent dip below $113,000, hitting a 17-day low.
“Retail traders have done a complete 180 after Bitcoin failed to rally and slipped under $113,000,” analysts at blockchain analytics firm Santiment said Wednesday.
Santiment also noted that the past 24 hours have seen “the most bearish sentiment on social media” since June 22, when fears of war in the Middle East triggered a wave of panic selling.
According to the firm, heightened negative sentiment can actually be a positive signal for dip buyers, especially when “fear is maximized and there’s blood in the streets.”
Short-term retail traders are more likely to panic sell or take profits quickly, unlike diamond-handed investors who hold for the long term. Santiment suggested that the current wave of panic selling could indicate a potential dip rebound ahead.
Bitcoin falls to support zone
Bitcoin dipped to $112,656 in late trading Tuesday on Coinbase, according to TradingView, marking its lowest level since Aug. 3, when it approached support around $112,000.
The cryptocurrency has now pulled back 8.5% from last week’s all-time high of just over $124,000, while the total crypto market capitalization has fallen below $4 trillion, hitting a two-week low.
The Bitcoin Fear & Greed Index has slipped into the “Fear” zone, registering 44 out of 100—its lowest reading since late June.
“Markets move in the opposite direction of the crowd’s expectations,” noted analysts at Santiment.
Will bull cycle history rhyme?
Market corrections during a bull run are nothing unusual and are a natural part of the broader cycle. Comparable pullbacks—often referred to as “bear traps”—have occurred at the same stage in past cycles.
During the 2017 bull market, Bitcoin dropped 36% in September before climbing to a new peak just three months later.
A similar pattern emerged in September 2021, when BTC slid 23% before rallying to an all-time high later that year.
If history repeats itself, a comparable correction in 2025 could see Bitcoin dip to around $90,000 next month before rebounding to a new all-time high.
