K33: Bitcoin has entered the "late stage of a bear market," and market signals are similar to the 2022 bottom.
PANews reported on February 18th that, according to The Block, research and brokerage firm K33 stated that the current Bitcoin market structure, derivatives positions, and ETF fund flows are highly similar to the late stages of the 2022 bear market, suggesting a potential long period of consolidation rather than a rapid rebound. Vetle Lunde, Head of Research at K33, stated that their proprietary indicators show a “striking similarity” to September and November 2022 (near the bottom of the bear market). However, historical experience shows that market bottoms are often followed by prolonged consolidation, with average 90-day returns in similar environments being only about 3%.
Data shows that Bitcoin has fallen nearly 28% since January, with funding rates negative for 11 consecutive days and open interest dropping below 260,000 BTC, indicating a positive liquidation of long positions. Spot trading volume decreased by 59% week-on-week, and futures open interest fell to a four-month low. On the institutional side, CME traders are relatively inactive, with Bitcoin ETP holdings decreasing by 103,113 BTC from their October peak, but 93% of peak exposure remains, suggesting that institutions are primarily reducing exposure rather than exiting completely. The Fear & Greed Index recently hit a historic low of 5, but Lunde points out that the average 90-day return for buying during periods of extreme fear is only 2.4%, far lower than the 95% during periods of extreme greed, indicating that fear does not reliably predict a strong rebound. He expects Bitcoin to consolidate in the $60,000 to $75,000 range for an extended period, with current entry points attractive, but patience is advised.
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