Bitcoin Sentiment Hits a Yearly Low; Bitwise Encourages Accumulation

Key Highlights:

Bitwise’s analysis indicates that selling pressure may have reached its peak, suggesting that current dips may provide favorable buying opportunities.
Smaller Bitcoin holders are continuing to accumulate, despite increased deposits from miners to exchanges.

Recent Bitcoin (BTC) price weaknesses seem to have dampened enthusiasm for the cryptocurrency, with Google search interest plummeting to a multi-month low. Current sentiment reflects typical bearish conditions, characterized by greater caution amongst investors.

The Crypto Fear and Greed Index reported a drop to a “Fear” level of 24, the lowest in a year, a stark decline from the previous week’s “Greed” level of 71. This trend mirrors sentiment from April when Bitcoin fell below $74,000 and aligns with cyclical market fatigue observed in 2018 and 2022.

Panic May Signal Buying Opportunity: Bitwise

Despite the significant drop in sentiment, Bitwise analysts contend that the existing conditions favor accumulation rather than retreat. Director André Dragosch, Senior Research Associate Max Shannon, and Research Analyst Ayush Tripathi attribute the recent downturn primarily to external factors, such as renewed US-China trade tensions that have increased global market risk aversion.

Bitwise’s weekly crypto market compass report noted that this correction was exacerbated by a record wave of futures liquidations, resulting in Bitcoin’s perpetual futures open interest falling dramatically by nearly $11 billion — marking the most substantial decline on record.

Dragosch noted that this forced liquidation event has significantly relieved selling pressure, setting up an opportunity for contrarian buyers similar to the Yen carry trade unwind in August 2024.

“Our in-house Cryptoasset Sentiment Index has reached its lowest point since that period,” the analyst stated, adding, “Historically, such extremes have marked favorable entry points ahead of seasonal strength in Q4.”

Smaller Bitcoin Holders Step Up Despite Miners’ Pressure

Onchain data provided by Glassnode indicates that smaller Bitcoin holders (1 to 1,000 BTC) have increased accumulation in recent days, balancing the decreased activity from larger holders. This shift is indicative of renewed confidence among retail investors, despite ongoing market volatility.

However, other metrics suggest a more intricate situation. CryptoQuant data indicates that miners have deposited around 51,000 BTC (over $5.7 billion) into exchanges recently, marking the largest inflow since July, which usually hints at imminent sell-side pressure as miners typically offload to liquidate or hedge their positions.

Simultaneously, long-term holders might be recently exiting, as data reveals 265,715 BTC sold over the last 30 days — the largest monthly outflow since January 2025.

Bitcoin long-term holder net-position change. Source: Maartunn/X

In contrast, Bitcoin’s stability around the $110,000 mark suggests that institutional or ETF demand is absorbing the excess supply. These contrasting trends imply that the market is evolving from a capitulation phase toward a reaccumulation phase, which Bitwise analysts see as a solid foundation for a bullish Q4.

This article does not constitute investment advice. All investments carry risk, and readers should independently verify any decisions.