What’s next for Bitcoin price as retail sentiment flips bearish?

Bitcoin price dips to $113,000, dragging the crypto market lower and pushing retail sentiment to its weakest level in weeks.

Bitcoin’s price (BTC) has slipped to $113,646 at press time, marking a 1.2% daily loss, a 5% decline in the past week, and a 4% drop over 30 days. The move leaves the asset 8.5% below its all-time high of $124,128, reached on Aug. 14. The downturn was mirrored in investor mood, as the Fear & Greed Index dropped 12 points in a single day, from 56 to 44, sliding back into “Fear” territory.

Derivatives activity was mixed. 24-hour trading volume rose 6.23% to $83.7 billion, while open interest slipped 0.77% to $80.36 billion, as per Coinglass data. Rising volume alongside falling open interest often suggests short-term churn and position closing, rather than fresh conviction, implying traders are reducing risk while volatility picks up.

Sentiment turns negative but Bitcoin whales accumulate

According to an Aug. 20 update from Santiment, retail traders have shifted to their most bearish sentiment since June 22, when war concerns triggered widespread selling. Because markets often move against the crowd, analysts pointed out that historically, this kind of pessimism has preceded price recoveries.

In contrast to retail behavior, large holders remain active. On Aug. 19, Santiment reported that wallets holding between 10 and 10,000 BTC added 20,061 coins since mid-August, and have accumulated 225,320 BTC since March. Santiment noted these wallets’ positioning has closely tracked future price direction for much of the past five years.

Glassnode highlights fragile conditions

Glassnode’s Aug. 19 market pulse report outlined the shift from Bitcoin’s rally above $123,000 into a sharp retracement toward the $114,000 air gap. With the relative strength index cooling and the cumulative volume delta going negative, spot market momentum has weakened. Sellers dominated the order books, despite a brief recovery in volumes.

Futures markets also softened. Before a wave of deleveraging, open interest hit extremely high levels, and funding rates indicate that traders are still paying to go long despite waning confidence. Options markets displayed a surge in activity, with open interest and volatility spreads rising and a positive 25-delta skew, indicating a greater need for downside hedges.

Institutional flows remain supportive. Last week, over $880 million was invested in Bitcoin exchange-traded funds, showing that demand is still strong despite volatility. Although entity-adjusted transfer volume increased, on-chain user activity and fees decreased, suggesting significant capital movements during the drawdown.

The report observed that 96% of supply in still in profit and realized P/L ratio has reached 2.4, meaning profitability is still high at a level that suggests caution but is not yet overheating. The outlook for Bitcoin, according to Glassnode, hinges on whether the decline continues into deeper consolidation or if ETF demand and whale accumulation can counteract waning spot signals.