 ▲ Bitcoin (BTC) / ChatGPT-generated image |
Bitcoin (BTC) has been extending its downward trend for several consecutive days, intensifying anxiety among investors. As a result, an assessment has emerged that retail investors are increasingly immersing themselves in meta-analyses that examine sentiment on social media in an effort to predict the market bottom.
According to a recent report released on February 7 (local time) by the digital-asset sentiment analysis platform Santiment, retail investors are attempting to identify buying opportunities by detecting signs of capitulation from other market participants. Santiment explained that efforts to determine entry timing by observing others’ capitulation signals occur frequently and typically appear near market bottoms. It added that there is also a possibility the market bottom may have already formed while the general public continues to wait for clearer capitulation signals.
Indeed, online discussions referencing “capitulation,” a term used to describe market surrender, have surged sharply. Google Trends data show that the search index for the keyword “crypto capitulation” jumped vertically from 11 on February 1 to 58 on February 8, reflecting extreme fear among investors. This reaction is interpreted as a response to Bitcoin’s decline to around $60,000 on February 5, marking its lowest level since October 2024.
Experts remain divided over whether the current situation represents a genuine market bottom. Market analyst Caleb Franzen warned that while capitulation has become the keyword of the week, it is important not to overlook that multiple capitulation events can occur during a bear market. Crypto analyst Ted also offered a cautious view, noting that although the recent sharp drop appears to signal capitulation, it may not represent the final bottom of this cycle.
On-chain indicators are clearly flashing oversold signals. Bitcoin’s Relative Strength Index (RSI) has fallen to its lowest level since the FTX bankruptcy in 2022, suggesting that selling pressure may be losing momentum. The Crypto Fear and Greed Index has also dropped to a level of 7, classified as extreme fear, showing that investor sentiment has frozen. Santiment added that when public distrust reaches an extreme, the likelihood of a short-term rebound rally increases.
The crypto market has now moved beyond a simple price correction and entered a phase that tests investors’ psychological limits. While retail investors closely monitor shifts in public sentiment in an attempt to catch the bottom, institutional investors are carefully watching changes in Bitcoin dominance and on-chain indicators to prepare for potential market shifts. Until uncertainty is resolved, a conservative approach that accounts for heightened volatility is required.
Disclaimer: This article is provided for investment reference only, and no responsibility is taken for any investment losses incurred based on its content. The information should be interpreted solely for informational purposes.