Fear spreads through the cryptocurrency market... On-chain indicators are 'bottom signals'

Doohyun Hwang

Summary

Bitcoin fell below $100,000, spreading a pessimistic mood across the cryptocurrency market.
However, major on-chain indicators have entered levels that in the past led to rebounds after short-term lows, and are thus analyzed as a rebound threshold.
Institutional investors also said they plan to increase cryptocurrency allocations in anticipation of next year's spot altcoin ETF approvals and regulatory changes.

Bitcoin (BTC) has fallen below $100,000 again, spreading a pessimistic mood across the cryptocurrency market. However, analysis shows that major on-chain indicators are instead signaling a bottom.

On the 13th (local time), on-chain data analysis platform Santiment said that investor sentiment toward major cryptocurrencies such as Bitcoin, Ethereum (ETH) and XRP has noticeably contracted over the past few days. It explained that as prices fell in succession, retail investors shifted into a defensive posture.

Santiment analyzed, "When Bitcoin slid below $100,000 for the second time this month, retail investors' fear surged," adding, "Bitcoin's positive-to-negative ratio has become unusually flat, Ethereum shows only a faint positive trend, and XRP is approaching its strongest fear period of the year." It added, "Generally when this zone is entered, short-term rebounds often occur. Prices frequently move opposite to the tone on social media."

On-chain indicators also support this trend. According to CoinDesk, Bitcoin's Net Unrealized Profit (NUP) ratio fell to 0.476. This is a level that in the past has formed several short-term lows followed by double-digit rebounds. NUP entering this zone indicates that a major buying cohort is realizing losses, which is typically interpreted as a rebound threshold.

Alex Kupchykebich, an FxPro analyst, said, "Attempts to form a bottom are visible, but each time a rebound appears it is blocked by strong selling pressure," adding, "This is a typical flow of a medium-term correction, not a sign of cycle collapse."

Institutional investors also maintain cautious optimism. In a recent survey by asset manager Sygnum, 61% of institutions said they plan to increase their cryptocurrency allocations in anticipation of expected spot altcoin ETF approvals and regulatory changes next year. A strategist holding a large amount of Bitcoin reportedly added 487 bitcoins last week, bringing total holdings to 641,692.

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