Bitcoin News Today: Panic Selling Unleashed: Is This Bitcoin's 'Blood in the Streets' Moment?

Retail sentiment in the cryptocurrency market has shifted dramatically, with Bitcoin falling to a two-week low below $113,000, prompting a wave of panic selling among retail investors. According to blockchain analytics firm Santiment, retail traders have turned “ultra bearish,” marking the most pessimistic social sentiment since mid-June, when geopolitical tensions in the Middle East fueled a similar wave of panic[2]. The firm noted that such extreme bearishness can be a positive sign for long-term investors, as it often precedes a market bounce. “Blood in the streets and fear maximized” is a signal for potential bargain hunters looking to capitalize on overreactions[2].

Bitcoin’s recent decline has been steep, with the price dropping to $112,656 on Coinbase, its lowest since early August. The cryptocurrency has now retreated 8.5% from its recent all-time high of over $124,000. Meanwhile, the total crypto market capitalization has dipped below $4 trillion, reaching a two-week low. The Bitcoin Fear & Greed Index, a widely followed sentiment indicator, has also reflected this shift, dropping to 44 out of 100, its lowest since late June[2]. This index, which measures retail sentiment by analyzing social media, forums, and trading activity, is currently in the “Fear” category, indicating widespread pessimism among market participants.

Historical patterns suggest that such corrections are not uncommon during bull cycles and often serve as a necessary part of the market’s natural rhythm. In 2017, Bitcoin experienced a 36% correction in September before surging to new highs three months later. A similar pattern was observed in 2021, when the asset dropped 23% in September ahead of an all-time high later that year. If history repeats, Bitcoin could potentially fall to as low as $90,000 next month before rebounding[2]. These past cycles highlight the importance of long-term positioning and patience during volatile periods.

Crypto analyst Atlas has echoed these concerns, warning that the current market correction could represent the “biggest bear trap” in years. He argues that the market structure today mirrors conditions from both 2017 and 2021, just before major altcoin rallies. The current dip in market cap, Atlas suggests, may be luring investors into selling at inopportune times, only to miss out on a potential rebound. If history repeats, he estimates that early adopters could see returns where every $200 invested might turn into $75,000[3]. This pattern of consolidation, sharp shakeout, and explosive recovery is seen as a recurring feature of bull cycles.

Market observers are also watching closely for signs of a broader rotation into altcoins, which tend to outperform Bitcoin during later stages of bull markets. Santiment highlighted that panic selling is more common among short-term traders, while long-term “diamond-hand” investors remain unfazed. This divergence in behavior may indicate that the current correction is not a bear market but a cyclical pullback. The total market cap is currently at a consolidation phase, and many analysts are waiting for a breakout before making long-term investment decisions[2].

Source: [1] Crypto - Fear & Greed Index (https://en.macromicro.me/charts/34417/crypto-fear-greed-index) [2] Bitcoin Corrects Below $113K As Retail Traders Panic Sell (https://cointelegraph.com/news/retail-flips-ultra-bearish-bitcoin-dips-113k-santiment) [3] Analyst Warns of 'Biggest Bear Trap' Before Explosive ... (https://cryptodnes.bg/en/analyst-warns-of-biggest-bear-trap-before-explosive-altcoin-season/)