Following the recent market whirlwind that occurred over the weekend, Bitcoin has fallen towards the $111,000 price level again as the market turns bearish. Amid this waning movement in price, retail players’ sentiment is still underwater, with these investors sending a large quantity of BTC to crypto exchanges.
Retail Traders Turn Bearish On Bitcoin
US President Donald Trump’s announcement of a 100% tariff on Chinese imports caused market jitters. During the announcement of heightened trade tariffs, Bitcoin and nearly all other altcoins experienced strong sell pressure, which led to a significant capitulation.
While the broader crypto market is persistently fluctuating, a worrying trend has been observed among Bitcoin retail investors. CryptoQuant, a leading on-chain and data analytics firm, has outlined a negative reaction from the retail Bitcoin investors towards the latest United States tariff shock.
In the quick-take post shared by CryptoQuant, Maartunn, an author and market expert, confirmed this negative response due to the massive inflows from the players to crypto exchanges. The retail investors here include wallet addresses holding less than 100 BTC. Meanwhile, wallet addresses holding above 100 BTC are usually linked to whales such as institutional players.
After examining the Bitcoin Exchange Retail Inflow, Maartunn reported that these investors sent around $1.359 billion worth of BTC to Binance, the world’s largest cryptocurrency exchange. This massive retail capital inflow to the exchange was carried out in a single day, particularly on October 11th.
According to the crypto expert, this is one of the largest single-day spikes in retail deposits to the Binance platform over the past year. Maartunn has highlighted retail inflows to the crypto exchange in each month for the past 12 months. The last inflows were recorded in July this year, with $1.375 billion worth of BTC sent to Binance.
Historically, each of these spikes in retail influx has coincided with significant price movements, either upward or downward. Such development demonstrates that retail is still more reactive than proactive. Instead of anticipating the market, their flows usually follow it.
BTC Funding Rates Shifting Into A Negative Territory
Darkfost, a market expert, has also reported that the funding rate on Binance has flipped into a negative territory in the fluctuating market. This shift signals a notable change in market sentiment as investors have grown cautious in the current market state.
A negative funding rate is not entirely a bearish development. According to Darkfost, it’s usually a good idea to purchase or consider a long position when funding rates turn extremely negative, especially if the price begins to trend upward.
Since it typically highlights a disbelief sentiment among traders, it causes robust contrarian opportunities. Some of the periods this trend was observed were October 16, 2023, and September 9, 2024, where BTC rallied from $28,000 to $73,000 and from $57,000 to $108,000, respectively. With the funding turning highly negative again, Darkfost is confident that a similar result could reemerge and trigger a strong rally.
