Bitcoin’s (BTC) Dip-Buying Sentiment Surges; Here’s Why It Could Backfire

Strong retail optimism marks the wrong time to buy as fear, not FOMO, fuels true rebounds.

Bitcoin’s slide from above $115,000 to $113,000 has triggered renewed excitement among retail traders eager to “buy the dip.”

However, past data warns that history favors more downside.

Misplaced FOMO?

According to Santiment, retail traders are increasingly vocal about buying the dip after Tuesday’s modest market pullback. The firm noted that such increased enthusiasm for dip-buying has historically led to further downside pressure rather than a quick rebound. In previous cycles, the most profitable entry points tended to appear when retail sentiment was low and very few expected a recovery. Santiment warned that traders often misjudge market bottoms, and optimism quickly turns to fear once prices continue to slide.

True accumulation phases, it added, typically occur only after this change from FOMO to FUD; this is when the market sees stronger rallies.

Adding to this cautious tone, crypto analyst Ali Martinez noted that the TD Sequential indicator, which is known for accurately predicting Bitcoin’s recent price swings, has once again flashed a sell signal. Martinez highlighted the indicator’s strong track record over the past few months, which correctly called a 7% correction in July, a 13% drop in August, a 10% rebound in early September, a 15% rally later that month, and a 19% correction in early October.

With the tool now signaling another potential sell, the analyst’s observation means that Bitcoin could be gearing up for another short-term downturn if the pattern holds true.

Bitcoin’s Fragile Floor

Crypto analyst Doctor Profit also delivered a bearish outlook for Bitcoin. In his latest post on X, he warned that while markets widely expect a 25-basis-point rate cut from the Federal Open Market Committee (FOMC), the real impact will come from Federal Reserve Chair Jerome Powell’s remarks. He argued that many misunderstand the current policy shift and added that ending Quantitative Tightening (QT) does not signal the beginning of Quantitative Easing (QE).

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Instead, liquidity remains tight, banks face funding shortages, and central banks are merely stabilizing a fragile system rather than injecting new money. Doctor Profit believes the Fed will not resume QE unless a major crisis forces it to print again. He pointed to deepening liquidity stress in the repo market and called it worse than the 2019 episode, with overnight funding collapsing and cash availability drying up.

Against this backdrop, he remains firmly short on Bitcoin and stocks, expecting euphoria to fade and liquidity conditions to deteriorate further until the next systemic break triggers Fed intervention.