Social sentiment around the majors has deteriorated sharply in recent days, according to Santiment, with traders turning noticeably defensive as prices continue to grind lower.
That kind of fatigue typically appears near inflection points — not at the start of new downtrends — and the data is beginning to reflect it.
“Bitcoin has dumped below $100K for the second time this month. Predictably, this has caused a wave of FUD and concerned social media posts from retail traders,” the firm said. “Santiment’s sentiment screens now show bitcoin with an unusually flat bullish-to-bearish ratio, Ethereum with only a marginally positive skew, and XRP sitting at one of its most fear-heavy readings of the entire year.”
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Historically, when retail flips negative across multiple large-cap assets at once, capitulation tends to follow, clearing out weak hands and resetting the bid for larger players.
Onchain readings support a bottoming outlook. Bitcoin’s Net Unrealized Profit (NUP) ratio has dropped to 0.476, a level that historically signals short-term market bottoms, as CoinDesk noted Wednesday.
The NUP ratio has previously triggered price rebounds, with bitcoin experiencing double-digit percentage rallies after similar readings in several instances in 2024.
This turn in mood comes as the broader market remains under pressure. Total crypto capitalization has fallen toward $3.47 trillion, extending a month-long downtrend.
FxPro analyst Alex Kuptsikevich noted in an email to CoinDesk that while short-term attempts at forming a bottom are visible, rallies are still being met with heavy selling, making for a classic signature of a medium-term correction rather than a structural break in the cycle.
Bitcoin’s slide toward $102,500 earlier (and now trading near $98,000) on Wednesday triggered another flush of realized losses among large wallets that bought around $110,000.
But on-chain data also shows that these flows are being absorbed by newer entrants, with institutional positioning leaning cautiously bullish into year-end. Sygnum’s latest survey reveals that 61% of institutions plan to increase their crypto exposure ahead of anticipated altcoin ETF launches and regulatory developments in 2026.
Strategic flows are adding weight to that view. Strategy, now one of the largest public Bitcoin holders, accumulated 487 BTC in the past week at an average of $102,557, bringing its total stash to 641,692 BTC.
On the Ethereum side, exchange reserves have dropped to their lowest level since May 2024, signaling a medium-term positive trend that typically reflects accumulation rather than distribution.
The market is still drifting lower, but the ingredients for a reflexive rebound are stacking up: negative sentiment, heavy long-liquidation clusters behind price, falling exchange balances, and sustained institutional buying.
Retail may be stepping back, but larger players appear to be preparing for the next leg — a setup that has historically preceded short, sharp reversals rather than deeper capitulation.