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Bitwise Sees Glimmer Of Hope For Investors After Grim Week

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After a bruising week for crypto, Bitwise says selling pressure is easing, offering investors a glimmer of hope even as market sentiment hit its lowest level since February.

Bitcoin fell below $96k and Ethereum, XRP and Solana tumbled as the Crypto Fear & Greed Index, a tool used to gauge market sentiment, plunged 6 points in the last 24 hours to 10, signaling “extreme fear” among crypto investors.

Crypto Fear & Greed Index (Source: Alternative.me)

But Bitwise’s European head of research Andre Dragosh said that “sellers are exhausted and it shows,” suggesting the market may be stabilizing after a string of declines.

While the firm’s sentiment index remains bearish, it is “less so than previous corrections despite lower prices,” he said.

Santiment Says Over-Leveraged Longs Are Largely Cleared

On-chain analytics firm Santiment echoed the same view, noting liquidations were far smaller than during past selloffs and that over-leveraged long positions have largely been cleared out. Retail wallets, meanwhile, have continued to accumulate even as larger holders reduced exposure.

“The market may have exhausted the supply of over-leveraged long positions to liquidate,” Santiment said, adding that a shift in wallet behavior could mark a “true bottom signal” for Bitcoin and broader crypto prices

Liquidations in the past 24 hours surpassed $763 million, according to Coinglass. Most of these liquidations ($580.39 million) were for long trades, which are bets that prices would rise.

This is far lower than the record $19 billion that was liquidated on Oct. 10, and there seems to have been a shift in recent hours, with the market seeing substantially more short liquidations than long liquidations during this period. For instance, $1.38 million was wiped out from short positions in the last hour, while only $696.90K was liquidated from longs. 

Santiment also pointed out that open interest for perpetual contracts is now a fraction of what it was a month ago, suggesting this could ”change the market’s internal dynamics.”

It added that while larger Bitcoin holders, specifically addresses holding between 10 and 10,000 BTC, have been steadily selling off their holdings since BTC reached its all-time high in October, smaller retail wallets “have continued to accumulate during the drop.” 

A “true bottom signal” for the market will likely be if that dynamic between large addresses and smaller wallets shifts, it said. 

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