After a brief improvement in positive sentiment, fear has once again taken over the crypto market, continuing to fuel discussions on social media. Bitcoin has dropped below 70,000 USD once again, causing concern among retail investors.
Although negative sentiment is spreading on social media, blockchain data reflects a more complex picture of the actual role of retail investors.
Concerns among retail investors are growing about whether Bitcoin will recover.
Blockchain analysis platform Santiment has recorded a significant increase in negative Bitcoin-related keywords on social media recently.
Terms like 'dip' and 'crash' frequently appear in discussions about BTC, reflecting a significant increase in FUD (fear, uncertainty, doubt) among retail investors.
Santiment states that severe feelings of despair among retail investors are often a contrarian signal, so when negative sentiment overwhelms to a certain point, the market often recovers as selling pressure nears exhaustion.
Terms like #dip, #pullback, #rejection, #crash, or #bloodbath are often safe buying moments, as stated by Santiment.
Santiment's charts have shown this logic throughout the past year.
However, the overall picture is much deeper than just market sentiment, as a report from CryptoQuant has revealed concerning differences between trading volume and the actual market share of retail investors.
Zizcrypto, an analyst from CryptoQuant, reported that the average trading volume over the past 30 days for small amounts (0–1,000 USD) from retail investors is at 96 million USD, the same level as the market's low point earlier in 2023.
At the same time, the trading share of retail investors (0–10,000 USD) has continuously decreased since the beginning of 2023, dropping from over 2.4% to about 0.7% and has stabilized at present.
The difference between trading volume and market share reflects that retail investors still play a role, but the structure of their role in the market has not expanded further.
In this context, the participation of retail investors is mostly focused on short-term fleeting cash flows rather than continuous involvement, as Zizcrypto stated.
Thus, Santiment's view may be accurate in the short term, but it remains difficult to use as a basis for predicting reversal directions similar to early 2023.
Recent analysis from BeInCrypto indicates that if Bitcoin closes the daily candle below 68,930 USD, the price may further decline to 65,550 USD.