Diverging sentiment as Bitcoin slides

Bitcoin traded near the mid-$80,000s after briefly dipping below key psychological levels during U.S. trading. The move places BTC more than 30% below its prior cycle peak, while the market mood has shifted into “fear” territory as reflected by common sentiment gauges.

Still, institutional behavior does not fully match the caution seen among smaller holders. Survey data cited by Coinbase indicates many professional investors view the current range as an opportunity rather than a reason to exit. A meaningful share report they would hold or add exposure even if the broader crypto market declines another 10%.

Institutional conviction: “undervalued” at current levels

In Coinbase’s “Charting Crypto Q1 2026” survey, most institutional respondents said Bitcoin looks undervalued in the $85,000–$95,000 range. The same research suggests that, since the previous market peak, many institutions have either maintained positions or increased allocations, framing the current phase as accumulation rather than capitulation.

One factor supporting this stance is the expectation of macro tailwinds later in 2026. Coinbase commentary points to the possibility of Federal Reserve rate cuts, which—if they materialize—could improve liquidity conditions and revive risk appetite across crypto markets.

ETF outflows rise, but whales keep buying

Optimism among large investors comes even as Bitcoin spot ETFs saw significant net outflows in late January. Weekly redemptions reached one of the largest levels on record, with major funds such as BlackRock’s iShares Bitcoin Trust accounting for a sizable portion of the withdrawals.

Meanwhile, on-chain indicators tell a different story. According to Santiment, “whale” wallets (commonly defined as addresses holding roughly 10 to 10,000 BTC) accumulated tens of thousands of BTC over a short window in January, while smaller holders were net sellers. Analysts often view this “smart money buys while retail sells” pattern as a potentially constructive setup—though it does not rule out continued volatility.

Why gold and silver are stealing the spotlight

The crypto drawdown coincided with a dramatic rally in precious metals. Gold surged to fresh record highs, and silver also posted sharp gains, as investors reacted to rising geopolitical risk and renewed trade-related uncertainty.

Bitcoin is frequently positioned as “digital gold,” but short-term market behavior can diverge from the narrative. During periods of stress, capital often moves first into traditional safe havens like gold, leaving crypto to recover later—especially if liquidity conditions improve.

What to watch next

• Whether spot Bitcoin ETF flows stabilize or continue to pressure price action
• Continuation (or reversal) of whale accumulation on-chain
• Macro signals: inflation, growth data, and the path of Fed policy in 2026
• Geopolitical headlines that may keep precious metals bid and risk assets volatile

For now, the market shows a split personality: institutions and large wallets lean toward accumulation, while retail and ETF flows reflect caution. That divergence often defines turning points—but timing remains uncertain.