Latest BTC market dip is relatively small, but sentiment is in freefall

Crypto capitalist sentiment is successful freefall during the latest marketplace dip arsenic marketplace analysts and traders hunt for a singular crushed for falling plus prices and Bitcoin’s descent beneath $100,000.

The crypto “Fear and Greed” index, a metric tracking capitalist sentiment, is astatine 22, signaling capitalist caution and hovering conscionable supra “extreme fear” territory — its lowest level since March, according to CoinMarketCap

“This dip has been the smallest of this cycle, 25% vs 31% and 32%, but it feels so, truthful overmuch worse. Sentiment cooked,” marketplace expert Nic Puckrin wrote.

The Crypto Fear & Greed Index sits astatine 22, signaling capitalist fearfulness and trending toward “extreme fear.” Source: CoinMarketCap

Over 70% of Polymarket traders present expect Bitcoin to dip beneath $90,000, a inclination that marketplace analysts person attributed to older Bitcoin whales cashing out. Long-term Bitcoin holders dumped implicit 400,000 BTC connected the marketplace successful October.

Market analysts, investors and traders are debating whether the latest dip signals the commencement of the adjacent prolonged crypto carnivore market oregon if cryptocurrencies volition signifier caller all-time highs successful 2026 if involvement rates proceed to driblet and liquidity flows into assets.

Related: Sour crypto temper could substance an unexpected rally this month: Santiment

Crypto marketplace investors hunt for a singular origin for BTC crashing beneath captious support

Bitcoin dipped beneath its 365-day moving average, a captious enactment level, respective times successful November and continued to determination little connected Friday, trading good beneath its 365-day average.

Bitcoin is trading good beneath its 365-day moving average. Source: TradingView

Senior Bloomberg exchange-traded money (ETF) expert Eric Balchunas rebuffed the idea that dense outflows from BTC ETFs were the superior origin of the continued terms diminution and said that ETF investors held strong, contempt a 20% terms shock.

ETFs saw astir $1 cardinal successful outflows implicit the past month, contempt October’s historical marketplace crash, which saw astir $19 cardinal successful leveraged bets wiped distant from the marketplace wrong 24 hours — the worst crypto liquidation lawsuit successful history, Balchunas said.

Alex Thorn, caput of firmwide probe astatine concern steadfast Galaxy, lowered his 2025 BTC terms forecast from $180,000 to $120,000 owed to respective factors, including capitalist rotation into competing narratives similar golden and AI.

Thorn besides said that leveraged liquidations successful crypto derivatives markets are besides 1 of the main culprits down falling plus prices.

Cathie Wood, the laminitis of concern steadfast ARK Invest, said that stablecoins are eroding Bitcoin’s marketplace share arsenic they go the store of worth for residents successful emerging economies.

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