Bitcoin Plunges Below $108,000: Why 'Buy the Dip' Calls May Be Bearish
Bitcoin crashed to a 50-day low of $107,389, triggering $137 million in liquidations. The sharp drop caught traders by surprise and was blamed on a decline in the Nasdaq 100 tech index amid growing doubts about the sustainability of the artificial intelligence sector's growth.
BTC/USD 1-day chart. Source: Bitstamp
But the most interesting thing started on social networks. The analytical platform Santiment records a surge in calls to “buy the dip” — and this may be a bad sign. It’s a paradox, isn’t it? The more people shout about a good buy, the further away it may be from the true bottom.
When Enthusiasm Becomes a Warning Sign
“People are clearly nervous and trying to find entry points now that prices have cooled down a bit,” says Santiment analyst Brian Quinlivan. Bitcoin has lost 5% in a week, and social media has exploded with advice to grab “cheap” coins.
Santiment warns: Don't take the “buy the dip” chatter as a signal that a bottom has been reached. Real bottoms often form in an atmosphere of widespread fear, when the desire to buy evaporates. “Real bottoms often form when the crowd loses hope and is afraid to buy,” the analysts emphasize.
History confirms this principle: prices move against retail traders' expectations. The more people are confident that a bottom has been reached, the more likely it is to decline further.
Meanwhile, altcoins are preparing for revenge
Some traders see the Bitcoin pullback as a harbinger of the long-awaited altcoin season. Trader Ash Crypto wrote on social media X: “Altcoins are the most oversold they’ve ever been. Even during the Covid crash, FTX collapse, or trade wars, they weren’t this oversold.”
1-week chart OTHERS/ETH. Analytics: Ash Crypto
In his opinion, this could signal the approach of a “mega-alt season” similar to the powerful rallies of 2017 and 2021. On August 28, the CoinMarketCap Altcoin Season Index changed its status from “bitcoin season” to “altcoin season”, reaching 60 points out of 100.
Altcoin Season Index. Source: CoinMarketCap
Particularly optimistic is crypto trader and analyst Michaël van de Poppe, who stated on social media site X: “It’s very clear. It’s dip buying season for Ethereum as the bull run has just begun.”
1-week ETH/USD chart. Analysis: Michael van de Poppe
Trader Ak47 adds to the optimism: “With a possible Fed rate cut and an altcoin ETF approved this fall, the next rally could be huge.” CME’s FedWatch tool shows an 86.4% chance of the Federal Reserve cutting interest rates for the first time this year in September.
The current correction may be just a pause before a new round of growth. But remember the main rule: when everyone is shouting “buy”, it may be worth slowing down and waiting for a real capitulation.
Source: cryptonews.net
