Crypto Market Faces Diverging Sentiments Between Retail and Pros

• Retail crypto sentiment hits historic lows, contrasting with professional optimism.
• Memecoins like Dogecoin and Shiba Inu see steep declines, deepening retail losses.
• Solana gains retail traction, while Ethereum sentiment struggles at record lows.

According to industry leaders, the cryptocurrency market is grappling with a sharp contrast between retail and seasoned investors’ outlooks. While seasoned investors have a positive outlook for the market’s long-term future, retail demand has plunged to a level not seen in years.

Bitwise Chief Investment Officer Matt Hougan highlighted this sharp contrast in a Feb. 7 post on X (formerly Twitter), stating, “There is a massive disconnect between retail and professional sentiment in crypto today. Retail sentiment is at its worst in years, yet professionals are incredibly bullish. It’s living in two different worlds.”

The Crypto Fear and Greed Index, a measure of general market sentiment, dropped to a “Fear” level of 44, down a steep path from a “Greed” level of 69 the previous month. That action indicates retail investors’ general bearishness, many of whom have incurred losses with the wider memecoin and altcoin markets in shambles.

According to ETF expert James Seyffart at Bloomberg, the downturn in sentiment is partially a result of retail investors holding memecoins and altcoins that have plunged in value. For one, three of the biggest memecoins in terms of value—Pepe, Shiba Inu, and Dogecoin—dropped 35.31%, 20.82%, and 24.69%, respectively, over the past week, according to CoinMarketCap data.

“This is one of the worst extended altcoin bloodbaths I can remember,” pseudonymous crypto trader DFarmer commented.  

Interestingly, retail sentiment varies between individual networks and individual tokens. Solana, for instance, saw relatively high retail excitement, with its growing role as a memecoin hub drawing in buyers. On the other hand, retail sentiment in Ether (ETH) hit an all-time low.

DeFi Dad, a prominent figure in the crypto space, weighed in on these trends, saying, “Solana retail sentiment is a little more bullish than professionals, while it’s the opposite for Ether. ETH sentiment for retail is the worst ever—probably more bullish with pros.” 

Crypto market shaken by Trump’s tariffs

Broader geopolitical and macroeconomic trends have impacted the market, too. Cryptocurrency saw a tremendous boom and increase in price in the aftermath of Donald Trump’s election in November 2024, with Bitcoin (BTC) reaching an all-time high of $100,000 in December.

However, subsequent policy actions, such as Trump’s imposition of tariffs in Canada, Mexico, and China, triggered a spate of uncertainty, peaking at a record level of crypto liquidation and undermining investors’ confidence.  

Although Trump later paused the tariffs on Canada and Mexico following negotiations, the market remains volatile. Bitcoin is trading at $96,214 at the time of publication, struggling to reclaim the psychological $100,000 level.

Despite retail skepticism, the professional investing class remains convinced of a bright future for the cryptocurrency market. Institutional interest in Ethereum, driven by projects like the US President’s World Liberty Financial, demonstrates future prospects for growth in decentralized finance (DeFi) and blockchain technology.

Meanwhile, retail and expert opinion have become increasingly at odds, and with it, there are apprehensions about market behavior and small investors’ resilience in times of uncertainty. For now, the future of the crypto universe is in limbo, weighing between hope and fear.

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