The crypto has been witnessing weaker retail confidence, even as whales and institutional flows continued to support Bitcoin (BTC USD).
The Bitcoin price was around $113,700 at press time, about 8.5% below its August peak.
Bitcoin Price Decline Triggered Weaker Sentiment
The Bitcoin price lost about 0.15% over 24 hours and 6.54% in a week. Monthly performance also turned negative at around –3.7%.
The move left the asset well below its record of about $124,500, set on August 14. Investor sentiment shifted accordingly. The Fear & Greed Index dropped 12 points to 44.
The fall pushed sentiment back into the “Fear” range, showing weaker retail confidence at press time.
Market capitalization fell to $3.8 Trillion, mirroring the downturn in Bitcoin (BTC USD). Broader altcoin markets also traded lower.
Bitcoin (BTC USD) Price Decline Reflected in Derivatives
Derivatives markets showed mixed signals. Futures trading volume climbed more than 6% to $83.7 Billion over 24 hours. At the same time, open interest slipped nearly 1% to $80.3 Billion.
This divergence often indicated churn. Rising volume with falling open interest suggested that traders closed existing positions rather than opening new ones.
Analysts said this pointed to reduced risk appetite while volatility remained elevated.
Other data signaled stress in derivatives markets. Open interest had reached historically high levels before the latest decline.
Funding rates, which measure the cost of holding futures contracts, stayed positive. That suggested traders still paid to hold long positions even as confidence weakened.
Options activity also rose. Open interest expanded and volatility spreads widened. The 25-delta skew, a measure of options pricing, turned positive.
This showed stronger demand for downside hedges and protection against further price losses.
Retail Bearishness Contrasted with Whale Accumulation
Retail sentiment weakened to its lowest level since June 22, according to Santiment. Analysts compared the downturn to the period when war concerns drove broad selling earlier in the summer.
Markets often moved against retail positioning. Historical data showed that sharp retail bearishness sometimes preceded recoveries. Still, retail activity remained cautious at press time.
Large holders acted differently. Wallets holding between 10 and 10,000 BTC added more than 20,000 tokens between mid-August and August 19.
Since March, these wallets accumulated over 225,000 BTC. Santiment said whale positioning closely tracked price direction during the past five years.
Institutional flows supported accumulation. Bitcoin (BTC USD) ETFs attracted $880 Million in inflows during the previous week. This highlighted ongoing institutional demand even as spot momentum weakened.
Indicators Suggested Fragile but Profitable Market
Glassnode reported on August 19 that the rally above $123,000 had reversed into a retracement toward $114,000. Several indicators confirmed weaker momentum for Bitcoin (BTC USD).
The relative strength index cooled, while the cumulative volume delta turned negative. This showed that sellers dominated order books despite brief recoveries in trading volumes.
On-chain data painted a mixed picture. Adjusted transfer volume increased, suggesting larger capital moves.
At the same time, active addresses and transaction fees declined, showing weaker user activity. Analysts said this divergence reflected significant institutional flows during a period of reduced retail engagement.
Profitability remained high despite the pullback. About 96% of the supply was still in profit at press time.
The realized profit-to-loss ratio reached 2.4. This suggested profitability across the market, although not yet at overheated levels.
Bitcoin (BTC USD) Outlook Hinged on Whales and ETFs
The Bitcoin price traded well below its August record at the time of writing. Retail sentiment turned negative, but whale accumulation and institutional inflows offset some selling pressure.
Analysts said the next phase depended on whether ETF demand and whale buying outweighed weaker spot activity.
If institutional flows persisted, they could stabilize the market even as retail remained cautious.
Source: https://www.thecoinrepublic.com/2025/08/21/heres-why-bitcoin-btc-usd-price-slipped-9-from-august-peak-can-btc-recover/
