Important points:
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Bitwise analysts argue that the selling pressure has likely peaked and that the drop could be a good buying opportunity.
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Even as miners increase their exchange deposits, small BTC holders are accumulating.
The recent drop in Bitcoin (BTC) prices seems to have dampened the enthusiasm, with Google search interest in the asset dropping to multi-month lows. The latest sentiment readings reflected the situation typically observed during bearish phases, where caution prevails across crypto markets.
According to a report from Cointelegraph, the Cryptocurrency Fear and Greed Index hit a “fear” level of 24, the lowest “fear” level in a year, and a significant drop from last week’s “greed” value of 71. This decline reflects sentiment levels seen in April, when Bitcoin briefly fell below $74,000, and parallels previous cycles of market fatigue in 2018 and 2022.
Panic could be an opportunity for Bitcoin: Bitwise
Despite the sharp drop in sentiment, Bitwise analysts believe that the current setup favors accumulation rather than a pullback. Director and head of research Andre Dragosh, senior researcher Max Shannon and research analyst Ayush Tripathi said the recent correction was driven primarily by external factors, such as the flare-up of trade tensions between the U.S. and China, which caused widespread risk aversion across global markets.
Bitwise’s weekly Cryptocurrency Market Compass report said Bitcoin’s perpetual futures open interest plummeted by nearly $11 billion, “the largest decline in history,” with the correction amplified by a record wave of futures liquidations.
Dragosh said the forced liquidation event “significantly depleted selling pressure” and set the stage for contrarian buying similar to the unwinding of the yen carry trade in August 2024.
“Our internal crypto sentiment index has fallen to its lowest level since that period,” the analyst said, adding, “Historically, extreme conditions like this have signaled favorable entry points ahead of seasonal strength in the fourth quarter.”
Related: Bitcoin retail interest in ‘bear market’ as crypto sentiment turns fearful
Small Bitcoin holders rise under pressure from miners
On-chain data supports this view. Glassnode reports that small Bitcoin holders of 1 to 1,000 BTC have increased their accumulation in recent days, offsetting the decline in purchases by larger holders. This pattern suggests renewed confidence from retail and mid-market investors despite continued market volatility.
However, other indicators paint a more complex picture. According to data from CryptoQuant, miners have deposited approximately 51,000 BTC (equivalent to more than $5.7 billion) to the exchange since last Thursday, the largest inflow since July. These activities often precede sell-side pressure, as miners commonly move holdings to exchanges to liquidate or hedge positions.
Similarly, long-term holders may also be exiting their positions, as data shows 265,715 BTC were sold in the past 30 days, the largest monthly outflow since January 2025.
Nevertheless, Bitcoin’s stability around the $110,000 level suggests that institutional and ETF demand may be absorbing excess supply. These contradictory trends suggest that the market is moving from capitulation to reaccumulation, a situation Bitwise analysts see as the basis for a bullish fourth quarter.
Related: Bitcoin Coinbase Premium keeps BTC above $110,000: Will this level be maintained?
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.