K33 reports that the derivative mode and current position of Bitcoin are very similar to the bottom of the bear market at the end of 2022, based on a composite model tracking derivative yields, open interest, ETF flows, and macro indicators. According to Research Director Vetle Lunde, many current signals indicate defensive behavior across the market, including persistently negative funding rates, a sharp decline in nominal open interest, and reduced leverage—all suggesting that traders are closing risks instead of building new directional bets. Trading activity and futures have significantly decreased following recent sell-offs, with trading volumes and futures positions dropping to multi-month lows. Volatility has also begun to return to normal levels, which typically occurs when markets shift from capitulation to stabilization. Institutional participation also appears cautious, with weak activity on CME and significant outflows from Bitcoin ETP holdings, although most institutional exposure remains unchanged from peak levels. K33 notes that similar regimes in history have coincided with market bottoms, but they have been followed by slow consolidation phases, rather than quick recoveries. Based on past analytical measures, the 90-day returns in such environments are modest or slightly negative. Therefore, the company predicts that Bitcoin will primarily remain within a range—around $60,000 to $75,000—for an extended period. The setup may provide attractive long-term entry levels, but the recovery is likely to be gradual and will require patience rather than signaling an imminent breakout.
