The recent wave of selling in Bitcoin, Ethereum, and XRP reflects panic selling by smaller investors, rather than signaling the start of a new bear market.
According to data from Santiment, the crypto market mainstays—Bitcoin (BTC), Ethereum (ETH), and XRP—are flashing “oversold” signals. This condition suggests that potential bottom levels have been reached and that the current downtrend may be nearing an end. The recent sell-offs in BTC, ETH, and XRP are not driven by institutional players; instead, they reveal exhaustion among retail investors. Santiment interprets this selling at a loss by retail participants as an indication that the prevailing bearish market conditions might be close to concluding.
Retail Investors Take Center Stage in Bitcoin, Ethereum, and XRP
On-chain data indicates that major funds are not selling off in the background; rather, the sales observed stem primarily from retail investors. As short-term holders offload their assets at a loss, individual investors appear to be losing their “bullish” conviction.
According to the data, wallets holding less than 0.01 BTC have reduced their balances by approximately 0.36% over the last five days. On the Ethereum side, wallets containing less than 0.1 ETH sold close to 1% of their holdings within a month. Finally, XRP wallets have executed sales amounting to 1.38% since the beginning of November. While these sales appear small in percentage terms, they collectively reflect a massive sell-off by small investors.
Could the Downtrend Be Over?
Data from CryptoQuant also supports this thesis. According to CryptoQuant, approximately 65,200 BTC were sent to exchanges at an unrealized loss in a single day. Short-term investors are moving substantial amounts of BTC to exchanges during these bearish market conditions.
The bullish thesis enters the picture precisely at this point. The theory suggests that a portion of the supply has already been sold, while the remainder awaits its turn in the order book. Consequently, the downtrend may conclude as buying appetite increases.
Short-term investors generally move late. These investors, who execute trades (selling or buying) only after observing a market reaction, have currently realized their sales under the prevailing market conditions. Furthermore, an additional decline typically requires a new source of supply. Should this source fail to materialize, the crypto market could begin a recovery, followed by sharp upward movements.
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