Crypto sentiment platform Santiment is cautioning traders against assuming the market has already hit its floor, warning that widespread confidence in a bottom often precedes further declines.
Key Takeaways:
Santiment warns that rising “bottom is in” sentiment often signals more downside, noting Bitcoin chatter has turned increasingly fearful.
Bitcoin’s social dominance has surged above 40% as positive sentiment hits a one-month low.
Amid $1.17B in recent ETF outflows, Santiment says such outflows have historically aligned with market bottoms.
“Be cautious when you see a widespread consensus forming about a specific price bottom,” the firm said in a report published Saturday, adding that “true bottoms often form when the majority expects prices to fall further.”
The warning comes after Bitcoin briefly slipped below $95,000 on Friday during a broader tech-led sell-off.
Santiment: “Worst Is Over” Chatter Signals More Downside Ahead
Santiment noted a surge in social media chatter claiming the worst is over, a signal it believes often points in the opposite direction.
Historically, bottom-calling tends to spike when psychological thresholds such as Bitcoin dropping under $100,000 are breached.
The firm added that Bitcoin’s ratio of positive to negative comments is now at its lowest point in more than a month, with “social dominance” soaring above 40%.
“As Bitcoin’s price fell, its social dominance soared to over 40%, showing it is the main topic of a very fearful conversation,” the report said.
Some market participants tied the drop to Strategy chairman Michael Saylor, with mentions of “Saylor” jumping sharply as prices fell.
During an appearance on CNBC, Saylor denied rumors that the company had been selling any of its Bitcoin.
Santiment also argued that recent spot Bitcoin ETF outflows, which totaled $1.17 billion over the past three trading days, could ultimately prove bullish.
“Large ETF inflows have often marked local price tops, while significant outflows have coincided with market bottoms, suggesting retail panic,” the firm said. Thursday alone saw $866 million in net outflows, the second-worst day on record.
The deterioration in sentiment has pushed the Crypto Fear & Greed Index down to an “Extreme Fear” score of 10, its lowest since Feb. 27.
Bitcoin Stalls Below $96K, But Analysts Say This Drop Looks Milder
Bitcoin has struggled to reclaim the $96,000 level following Friday’s sharp drop, echoing similar conditions seen earlier in the year when the asset tumbled from $102,000 to $84,000.
Yet some analysts view the current environment as less severe than previous downturns.
Bitwise’s European head of research, Andre Dragosh, said the situation “isn’t as bleak” compared with earlier corrections, adding that Bitwise’s sentiment index is showing a “positive divergence.”
Broader macro uncertainty continues to weigh on crypto markets. While President Donald Trump recently signed a bill ending the longest government shutdown in US history, an event some traders blamed for heightened volatility, attention has now shifted to the Federal Reserve’s next rate decision.
Despite the gloomy sentiment, some analysts see constructive signals on the charts. NorthmanTrader founder Sven Henrich pointed to a “falling wedge” pattern and “positive divergence,” calling it “potentially positive” for Bitcoin bulls.
Others note a striking gap between sentiment and fundamentals.
Messari research manager “DRXL” said that in eight years in the industry, he has never seen “such dissonance between the headlines and the sentiment,” adding, “Everything we once dreamed of is happening, yet it somehow feels… over.”
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