A critical gauge of trader mood in Bitcoin’s derivatives markets has flipped from negative to positive, snapping a five-day streak of pessimism.
This shift mirrors a similar pattern from early August that preceded a notable price recovery, offering a potential signal for the market’s next major move.
A Signal from the Derivatives Deep
According to pseudonymous CryptoQuant analyst Darkfost, the BTC futures composite sentiment index has moved back into positive territory. This hourly indicator, which synthesizes data including the net taker position, open interest, and long/short trade volumes, is a trusted barometer for short-term sentiment where the majority of trading activity occurs.
The recent negative streak saw the ratio hit a low of -0.7, indicating a period of significant stress and bearishness among traders. Darkfost said the current situation is a direct parallel to early August, when the index also fell below -1 before a strong rebound that pulled Bitcoin’s price upward.
“We are now in a configuration somewhat similar to early August, when the ratio dropped below -1 before bouncing back into positive territory and pulling price upward with it,” he wrote.
At the same time, the Binance Taker Buy-Sell Ratio, another derivatives metric flagged by CryptoQuant, recently fell to a cycle low of approximately 0.95, a level that has previously marked attractive entry points for contrarian buyers anticipating a sentiment shift.
This recurrence suggests the market could be setting up for a comparable bullish reversal, though continuation of this trend is required for confirmation.
The shift has also occurred against a backdrop of heightened anxiety. As CryptoPotato reported earlier, social media commentary on BTC recently reached its most bearish level since late June. According to market intelligence provider Santiment, that point has historically aligned with local price bottoms.
Price Action and Broader Context
After setting a new record high above $124,000, Bitcoin has faced some selling pressure. At the time of writing, the OG cryptocurrency was trading near $113,084, down 0.7% on the day after moving between $112,023 and $113,949.
In the past week, it lost 5.1%, underperforming the broader crypto market, which dipped by 3.30% in the same period. However, zooming out, the picture is much greener, with the asset up by almost 86% across the past year, even though it remains nearly 9% below its August 14 ATH.
Technical analysts caution that the $110K–$112K zone remains the battleground. They observed that BTC’s recent breakdown from its long-term ascending channel puts the 100-day moving average at risk. A failure to hold this range could expose the market to a drop toward $104,000, while a successful defense may fuel another rebound.
