Difference of “Dip” vs “Crash” in Crypto Market: Sentiment Data Exposes Price Reversal Patterns

Jakarta, Pintu News – The debate about “dip” and “crash” in the crypto market has resurfaced after Bitcoin (BTC) fell to US$60,000 on February 5. Santiment data shows that the sharp spike in mentions of the word “crash” on social media coincided with the formation of a local bottom, before BTC prices bounced around 13% to around US$67,000.

Interestingly, the “crash” narrative continued to be reinforced by the mainstream media when the bounce phase was already underway, giving room for large players to absorb panic selling from late-informed retail investors.

When “Dip” is still calm, “Crash” means collective panic

According to Santiment, the mentions of “dip” and “crash” on social media reflect two different psychological phases. Throughout January, the term “dip” spiked several times when crypto prices fell, for example on January 26, but without triggering a major panic. In this phase, market participants tend to consider dips as natural corrections, so emotion-based selling pressure has not been too extreme.

Instead, the word “crash” begins to dominate the conversation when the decline reaches levels that trigger panic selling and capitulation. On February 5, Bitcoin’s drop to US$60,000 was the point at which the narrative changed from “natural decline” to “market crash”. Santiment notes that, historically, a spike in mentions of “crash” often serves as an indicator that the selling pressure is nearing a peak and a relief rally is opening up.

Also read: 3 Factors that Allegedly Triggered the Latest Bitcoin Crash Below $60,000

Late Media Narratives and Opportunities for Big Players

Santiment also highlighted the gap between actual price conditions and the mainstream media narrative. While BTC has recovered around 13% from US$60,000 to US$67,000, some media outlets are still running “crash” headlines as if the fall has just happened. This lag could potentially encourage retail investors to sell at lower prices, even though the market has started to turn around.

In this context, large players who are faster at reading on-chain data and order flow can take advantage of the time difference. They have the opportunity to buy from panicked sellers who react based on the news, not real-time market conditions. This pattern also explains why extreme sentiment data often coincides with a local bottom rather than the start of a new fall.

Also read: 23% of Traders Convinced of Fed Rate Cut in March, but Warsh Makes Markets Wary?

Arthur Hayes: Not Fundamentals, But IBIT Product Hedging

Former BitMEX CEO Arthur Hayes attributes the current Bitcoin sell-off not to fundamentals, but to the hedging mechanism of structured products linked to the iShares Bitcoin Trust (IBIT). Banks that issue such products have to delta-hedge when the price of Bitcoin breaches a certain level, which can trigger rapid and sharp price movements.

According to Hayes, it is these dealer position adjustments that magnify selling pressure in a short period of time, rather than fundamental changes to the Bitcoin network or user adoption. He said he is working on a comprehensive list of structured bank notes to map out trigger points that could lead to extreme up or down spikes. For traders, this means that short-term price dynamics are increasingly influenced by the structure of financial products, not just retail spot action.

Conclusion

The difference in how traders interpret “dip” and “crash” reflects the shift from a normal correction to a collective panic phase. Santiment’s data shows that spikes in the “crash” narrative often mark local bottom areas, while price recoveries are already underway when the mainstream media is still amplifying the story of the fall.

On the other hand, Arthur Hayes’ analysis shows that the recent sharp moves have been driven more by hedging structured products like IBIT, rather than crypto fundamentals. For market participants, understanding the sentiment dynamics and financial mechanisms behind price movements is key to avoid getting caught selling at the point of capitulation.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Crypto.news. Why traders see a crypto ‘dip’ very differently from a ‘crash’. Accessed February 9, 2026.
• Featured Image: Generated by AI