Crypto Selloff: Bitcoin Dumps Under $99K, but Retail Sentiment Flashes Bottom for BTC, ETH, XRP

In recent days, a fresh wave of pessimism has washed over the cryptocurrency markets, as prices for major assets like Bitcoin, Ethereum, and XRP continue to decline. Despite the negative sentiment among retail traders, some analysts believe this shift could actually signal a potential turning point for the market.

Pessimism Sweeps Through Crypto Markets Amid Selloff

Market sentiment has taken a noticeable downturn, with traders becoming more defensive as prices decline. Reports indicate that Bitcoin has fallen below the $100,000 mark for the second time this month, triggering a flurry of fear, uncertainty, and doubt (FUD) among retail investors. This kind of fatigue in the market often appears near inflection points, rather than at the beginning of new downtrends, suggesting that the current sentiment could be more significant than it appears.

Retail Sentiment Indicates a Potential Bottom for Major Cryptos

According to sentiment analysis, Bitcoin's bullish-to-bearish ratio has become unusually flat, while Ethereum shows only a slight positive skew, and XRP is experiencing one of its most fear-laden readings of the year. Historically, when retail sentiment turns negative across multiple large-cap assets, it often precedes a market capitulation that clears out weaker hands, allowing larger players to reposition themselves for potential gains. On-chain data supports this outlook, with Bitcoin's Net Unrealized Profit (NUP) ratio dropping to 0.476, a level that has historically indicated short-term market bottoms.

Institutional Investors Show Cautious Optimism Despite Market Pressure

Despite the prevailing market negativity, institutional investors appear to be taking a more cautious stance towards crypto assets. Recent surveys reveal that a significant majority of institutions intend to increase their exposure to cryptocurrencies in anticipation of upcoming altcoin ETF launches and regulatory developments in 2026. This strategic positioning suggests that while retail investors may be stepping back, larger players are preparing for the next phase of market activity.

Current Market Conditions Signal Possible Rebound for Cryptos

Although the market is currently on a downward trend, several indicators suggest that a rebound could be on the horizon. The combination of negative sentiment, heavy liquidation clusters behind current prices, and falling exchange balances points towards a potential reflexive recovery. Institutional buying remains strong, with large holders accumulating Bitcoin despite recent losses. As the market prepares for a possible rebound, the conditions indicate that rather than deeper capitulation, a sharp reversal could occur, aligning with historical patterns observed in previous downturns.