The crypto market’s pullback has sparked a wave of “buy the dip” chatter across social platforms, but sentiment tracker Santiment warns this could actually point to more downside.
After Bitcoin dropped about 5% over the past week, mentions of “buy the dip” jumped sharply. According to Santiment analyst Brian Quinlivan, traders are increasingly anxious to re-enter after prices cooled off from recent highs. However, the firm cautioned that heavy optimism during declines often serves as a contrarian signal.
“Rising talk of buying the dip doesn’t necessarily mean we’ve reached a bottom,” Santiment said in a weekend report. “A true bottom usually arrives when confidence fades and people are too fearful to step in.”
Market Pullback and Sentiment Shift
The total cryptocurrency market cap now sits near $3.79 trillion, reflecting a 6.18% weekly drop, based on CoinMarketCap data. Bitcoin is trading around $108,748, down 5% from last week and well below its Aug. 14 peak of $124,128.
Historically, markets tend to move in the opposite direction of retail expectations. That means the recent burst of optimism could still precede another leg lower. Still, market sentiment is improving slightly: the Crypto Fear & Greed Index climbed back to 48 (Neutral) on Sunday after dipping to 39 (Fear) just a day earlier.
Altseason Hopes Rise
Despite the correction, many traders believe the setup could be priming altcoins for a breakout. Popular trader Ash Crypto argued that altcoins are now “the most oversold ever” — even more than during the COVID crash or the FTX collapse. He suggested this could be a precursor to a “mega altseason,” reminiscent of the explosive rallies in 2017 and 2021.
CoinMarketCap’s Altcoin Season Index supports this view, recently flipping from “Bitcoin Season” to “Altcoin Season” with a score of 60/100.
Fellow trader Ak47 added that with a potential Fed rate cut and possible approval of altcoin ETFs this fall, conditions may be lining up for the next major rally. According to CME’s FedWatch Tool, markets currently see an 86.4% chance of the Federal Reserve lowering rates in September — a move that traditionally boosts appetite for risk assets like crypto.
