Retail Optimism vs. Technical Bearishness: Bitcoin's Correction May Deepen Before Rebound

Recent pullbacks in Bitcoin’s price have led to a notable increase in “buy the dip” discussions across social platforms, but analytics provider Santiment warns this could actually point to more downside ahead. Their Social Volume metric, which monitors how often Bitcoin dip-buying is mentioned, hit its highest point in 25 days after the coin dropped to $112,000. Historically, when retail optimism spikes like this, it often precedes further declines, as markets tend to move against the prevailing crowd sentiment. Santiment suggests that a genuine buying opportunity may only arise after widespread fear and capitulation set in Bitcoin Dip-Buy Calls Spike: Why This Could Actually Be Bearish [ 10 ].

Technical signals are also pointing to a bearish outlook. Binance’s

perpetual futures funding rates have dropped sharply into negative territory, reaching a yearly low of -0.0033, indicating that short positions are dominating Bitcoin Bearish Bets Mount: Funding Rates On Binance Slides Into ... [ 5 ]. The last time this occurred was in October 2023, and it suggests traders are bracing for further declines. While negative funding rates can sometimes lead to short squeezes, sustained bearish sentiment could deepen the correction before any reversal. On-chain analyst EgyHash emphasized that Binance’s large share of open interest (OI) makes these signals especially significant, as the exchange’s actions often impact the wider crypto market Bitcoin Bears in Control? Record Low Funding Rates on … [ 8 ].

Looking at historical trends, caution is warranted. Santiment’s review of Bitcoin’s social dominance—which now accounts for 43% of all crypto-related social conversations—shows similarities to previous turning points, such as the corrections in March 2020 and July 2021. These periods saw retail investors rushing in due to FOMO, just before the market rebounded Bitcoin Returns Under $117,000: Is Social Media FOMO To Blame? [ 12 ]. However, the current surge in attention comes as Bitcoin has yet to reclaim key support levels like $100,000. The Fear & Greed Index, which gauges market sentiment, is now showing extreme fear—a common sign before a market bottom, but one that often persists until a full capitulation occurs Bitcoin’s ‘Buy the Dip’ Surge May Signal Further Downside, Warns ... [ 9 ].

Institutional involvement paints a mixed picture. While spot Bitcoin ETFs have seen net inflows of $17.33 billion as of August 15, the seven-day minting ratio—a measure of institutional appetite—indicates waning interest at current prices Bitcoin funding rates hit YTD lows, bearish trend looms — … [ 6 ]. At the same time, large Bitcoin holders (“whales”) have been accumulating at record levels, with 19,130 wallets now holding more than 100 BTC. This contrast between speculative selling and strategic accumulation highlights a battle between short-term bearishness and long-term bullish positioning Will Bitcoin Crash or Rise in September 2025? - Analytics Insight [ 2 ].

Macroeconomic influences remain crucial. The weakening of the U.S. dollar, driven by expectations of Federal Reserve rate cuts, could benefit Bitcoin. However, short-term volatility is likely to continue as investors await September’s Personal Consumption Expenditures (PCE) report and possible political developments. Analysts such as Tom Lee from Fundstrat predict Bitcoin could recover to $120,000 by September, but this depends on changes in Fed policy and ongoing whale accumulation Will Bitcoin Crash or Rise in September 2025? - Analytics Insight [ 2 ].

For those considering investing, the prevailing advice is to proceed with caution. Santiment recommends waiting for retail enthusiasm to subside and for confirmation from technical or on-chain indicators before entering the market. Key short-term support is seen at $105,000–$104,000, with $100,000 acting as a potential bottom if prices fall further. While Bitcoin’s long-term outlook remains positive, the current environment suggests a phase of consolidation or correction is more probable than an immediate upward move Bitcoin’s ‘Buy the Dip’ Surge May Signal Further Downside, Warns ... [ 9 ].