Retail Panic Deepens as Bitcoin Holds Key Technical Support Levels

Bitcoin fear is peaking as traders panic below $113K, but history shows such selloffs often open doors for patient buyers.

Support between $107K and $110K is holding strong, giving long-term investors a possible chance to defend and add positions.

Crowd psychology keeps driving short-term swings as greed sparks drops and fear often sets the stage for market rebounds.

Following a dramatic change in emotion brought on by the top cryptocurrency falling below $113,000, bitcoin traders are now dealing with fresh uncertainties. Once driving bullish momentum, retail traders have now become pessimistic as market anxiety grows. After weeks of turbulence, Bitcoin failed to maintain rallies over $115,000, which led to this shift.

Analysts believe the growing panic could signal a major opportunity for patient investors. The price correction now tests key support areas while social sentiment reaches its lowest since June 22, when geopolitical tensions caused panic sells.

Sentiment Shift and Market Psychology

Santiment reported that retail traders made a complete 180 in attitude within the past 24 hours. Besides, the negative mood now reflects maximum fear levels, often associated with potential rebounds

Source: Santiment

On June 22, fears of war after U.S. strikes on Iran caused a sharp dip. However, the market later recovered quickly as investors realized the selloff was exaggerated.

Moreover, July 9 showed how crowd greed led to corrections despite easing U.S. tariffs boosting optimism. Excessive positivity marked by social metrics often triggers price drops, as seen again on August 18

Consequently, traders who rushed into dip-buying faced immediate losses as Bitcoin sank further. Hence, crowd psychology continues to play a defining role in shaping short-term moves.

Technical Levels Provide Support

Axel Adler Jr highlighted that the pullback remains moderate, showing only an 8% drop from the local peak. Additionally, Bitcoin holds within a dense demand zone between $107,000 and $110,000

The 111-day Simple Moving Average sits at $109,600, forming strong medium-term support. Furthermore, the short-term holders’ realized price stands at $106,800, aligning with a broader stability range.

Source: Axel Adler Jr

Consequently, these levels represent critical points where long-term investors may attempt to defend positions. Moreover, the 200-day SMA at $100,400 offers another safety net if downside pressure continues. The drawdown from the rolling high reached 8.2%, which remains manageable compared to earlier volatility this year.

Disciplined investors can often find advantageous entry points during fear-driven corrections. Therefore, purchasers who are patient may profit if Bitcoin settles over $107,000. Furthermore, unpredictability may continue to be driven by U.S. policy developments and global macro threats.

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