BTC Fear hits a new low, opening a unique buying phase

The key takeaways

• The Bitwise analyst believes that there is a good chance that dips are good buys.

• Even as exchange deposits increase, smaller BTC holders continue to accumulate.

Bitcoins are currently weakening (BTCGoogle’s interest in the asset has dropped to its lowest level for several months. These latest readings were similar to those seen during periods of bearishness, where caution is the dominant crypto sentiment. 

Cointelegraph reported The Crypto Fear and Greed Index is now at a “Fear” The level is 24, the lowest it has been in over a year. It’s also down from last week. “Greed” Reading of 71. The decline is similar to the sentiment seen in April when Bitcoin briefly dropped below $74,000. It also parallels past cycles of market fatigue from 2018 and 2022.

Bitcoin panic could lead to a profitable opportunity: Bitwise

Bitwise’s analysts are convinced that despite the dramatic drop in sentiment, the current situation favors growth, and not retreat. Director and head of research André Dragosch, senior research associate Max Shannon, and research analyst Ayush Tripathi said that the recent correction was driven largely by external factors, including renewed US–China trade tensions that triggered broad-based risk aversion across global markets.

Bitwise’s weekly crypto market compass report It was noted that Bitcoin’s perpetual open futures interest plunged by $11 Billion, indicating a correction. “the strongest decline on record.”

Dragosch stated that the forced liquidation has occurred now “meaningfully exhausted selling pressure,” Setting the scene for a counter-cyclical buying window, similar to Yen carry trade unwind In August 2024,

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

Related: Bitcoin retail interest is in ‘bear market’ as crypto sentiment flips to fear

Bitcoin holders of smaller sizes step in amid mining pressure

This view is supported by Onchain data. Glassnode reported This suggests that small Bitcoin holders (between 1 and 1,000 BTC) have increased their accumulations in the last few days to offset reduced purchases by large Bitcoin holders. The pattern suggests that retail investors and middle-tiers are regaining confidence, despite the continued volatility in the market.

Other indicators, however, paint a much more complicated picture. CryptoQuant data showed The largest inflow to date has occurred since last week, when miners deposited 51,000 BTC, worth over $5 billion, at exchanges. This activity is often preceded by sell-side pressure as miners move their holdings into exchanges in order to hedge or liquidate positions.

On the other hand, data may also indicate that holders of long term positions are exiting. indicated In the last 30 days alone, 265,715 BTC have been sold. This is the highest monthly volume since January 2025.

Bitcoins’ stability at around $110,000 suggests that ETFs and institutional demand is absorbing excess supply. The market’s opposing flow patterns suggest that it is moving from capitulation towards reaccumulation. Bitwise analyst see this setup as the foundation of a Q4 bullish. 

Related: Bitcoin Coinbase Premium keeps BTC above $110K: Will this level hold?

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.