Bitcoin sentiment has turned deeply bearish following a sharp January sell-off, pushing retail fear to post-November extremes according to data from Santiment. On-chain analysis from Alphractal’s Joao Wedson suggests short-term holders are under pressure, but a complete market bottom may not yet have formed as long-term holders have not fully capitulated. The technical structure remains weak, with Bitcoin trading below key moving averages, indicating any price rebound could be corrective rather than trend-changing.
Bitcoin struggled to regain strength on February 2 as weak sentiment persisted after last month’s sharp decline. The asset fell nearly 16% since January 28, briefly touching around $74,600 before stabilizing near $78,500.
According to Santiment data from February 2, negative sentiment reached its highest level since the crash on November 21. The recent recovery to approximately $78,300 resulted from retail traders closing positions and locking in losses amid rising uncertainty.
Joao Wedson, Founder and CEO of Alphractal, pointed out that market bottoms in Bitcoin occur only after certain conditions are met. He explained that bear markets end when the realized price of short-term holders falls below that of long-term holders.
Wedson stated that a new bull market begins only after the short-term prices rise above the long-term prices. Currently, these conditions do not appear to have been met.
TradingView data from February 2 shows Bitcoin’s daily chart indicates a bearish continuation pattern. The price was trading near $78,500 after breaching below the 20, 50, 100, and 200 Exponential Moving Averages.
Momentum indicators support this view, with the RSI near 28 and trending lower. From a structural point of view, Bitcoin has moved from a range distribution phase to a breakdown phase.
