Crypto traders have become bearish after Bitcoin and Ethereum struggled to maintain their recent profits, according to some on-chain metrics.
According to Encryption Data, Bitcoin has fallen nearly 7% in the past week, trading at $113,479 at the time of reporting. Ethereum experienced an even sharper decline, losing 10% in the same time frame and hovering around $4,269.
The decline is not limited to the two most popular digital assets. Other top 10 cryptocurrencies by market capitalization, including Solana, XRP, Dogecoin and Cardano, have also recorded double-digit losses in the past seven days.
The sudden reversal shows a harsh shift from the bullish optimism that dominated investor sentiment a few weeks ago. This has dropped to 52, the lowest level since June, the Crypto Fear & Greed Index, to a total of 52, according to Coinperps data.
Additional data from Santiment on August 20th confirms relaxed market sentiment. The company noted that social media sentiment around Bitcoin has reached its lowest level since June 22, when geopolitical tensions sparked panic sales.
addition:
“After Bitcoin failed to meet and fell below $113,000, the retailer went through a full 180.”
On the other hand, bearish mood appears to have influenced trading behavior.
Coinglass data shows that over 50% of Bitcoin positions are currently short, indicating that most traders expect further price drops. Meanwhile, 48% of traders have maintained a long, aggressive position in the past day.
In fact, crypto bettors on prediction platforms such as Polymarket are increasingly assigning a 60% chance that Bitcoin will drop below $111,000.
Crypto Research Platform Kronos claimed market anxiety was sparked due to concerns over potential rate cuts in the Federal Reserve in September.
According to the company:
“Powell’s Jackson Hole address remains a significant potential pivot (for the crypto market). Devish language can cause rebounds, and Hawkish tones can cause deeper corrections.”
In particular, the rate market shows great potential for mitigation, as CME FedWatch data shows an 81% chance.