Although the recent drop in Bitcoin has been alarming, K33 Research analyst Vetle Lunde suggests that December may actually become a turning point for the cryptocurrency market. Following the most severe correction since the last bear market, K33 believes that current signs indicate that the chance of a 'bottom rebound' is much higher than a further collapse.
Bitcoin has recently faced significant selling pressure, primarily due to structural factors. K33 points out that the Bitcoin spot ETF, which has been the main driver of market gains, has turned into a 'net seller' as of November; meanwhile, the trading activity of futures at the Chicago Mercantile Exchange (CME) has also dropped to a multi-year low, indicating a wait-and-see attitude from traditional finance (TradFi) capital. In terms of price performance, Bitcoin has recently significantly underperformed U.S. stocks, with its relative strength against the Nasdaq index having fallen to its weakest level since the end of 2024.
In this regard, K33 points out the market's blind spots: investors are overreacting to distant potential threats while ignoring strong signals right in front of them. The institution mentioned in its latest December outlook report:
Compared to a catastrophic drop of 80%, we believe the probability of the market experiencing a 'substantial rise' is much higher.
K33 listed several key factors for a bullish outlook. First, Bitcoin is currently trading near strong historical support levels—around $70,000 to $80,000; secondly, the overall positioning in the futures market is cautious, and there are no signs of overheating; the perpetual contract leverage is low, and even though prices are under pressure, there has not been a large-scale liquidation wave.
Regarding the recent fears permeating the market, such as the risk of quantum computing potentially cracking encryption technology, the possibility of Strategy selling Bitcoin, or concerns about Tether's solvency, K33 believes that while these worries sound alarming, the probability of them occurring in the short term is extremely low and should not be the main source of pressure on the current market.
On the contrary, K33 argues that the market focus should be on the upcoming short-term bullish factors. With a shift in policy direction, including the potential opening for U.S. 401(k) retirement plans to allocate cryptocurrency and the Federal Reserve (Fed) turning to support the cryptocurrency industry, K33 believes that structural upward space is forming.
K33 states that Bitcoin's current valuation reflects more of a panic sentiment rather than fundamentals.
Although the current market atmosphere remains cautious, K33's outlook suggests that December may be a golden window for investors to overcome fear and boldly enter the market.
This article is authorized for reprint from: (Block客)
Original title: (Is Bitcoin brewing a 'comeback'? K33 analysis: December is the 'key turning point')
Original author: Block Girl MEL
'Is Bitcoin falling to fear? K33 analyst: Market panic is excessive, the real good news is coming!' This article was first published in 'Crypto City'
