Sentiment is right now cautious I would say and there are probably still a lot of weak hands in the market who sell at any bad news... not because they believe they will loose everything, but because they want to buy back in at lower levels.

Most of the newer participants are getting burned over this strategy. Especially as these kind of drops, could also occur to the upside, because not only liquidity is low, but also supply. We saw what happened with the futures annoucement and that probably had no sustainable positive impact on price, it was just speculation.

However, we need to look at some positive developments, which would sustainable raise the price and value of bitcoin:

1. Crypto friendly regulation in one of the major western countries, so institutional money could buy in, without legal risks
2. Approval of an ETF
3. More adoption
4. Technological improvements (like lightning)
5. A killer app for a dApp

There are probably more, which could push the price upwards a lot and once price moves up, the real FOMO will set back in and push the price even higher. Why bother for a 1000$ drop, if BTC could be +30.000$ at the end of the year?