K33 Report: Bitcoin enters the late stage of the bear market similar to the lows of 2022, but the rebound will not come quickly; patience is still required.

Is Bitcoin Approaching Bottom?
K33’s latest report indicates that current market signals are highly similar to the late stages of the 2022 bear market. Downside risks have eased, but subsequent movement may enter a prolonged consolidation phase rather than an immediate strong rebound.
(Background: Bitcoin’s 40% retracement triggered “Four-Year Cycle Panic”; K33 states: deep bear markets are unlikely to recur, and long-term buying points have emerged.)
(Additional context: K33 suggests Bitcoin at $60,000 may have already bottomed out! Multiple historic panic-selling signals are present.)

Table of Contents

• Market structure mirrors features of late 2022 bear market
• Consolidation may continue, expected returns are low
• Trading activity cools, institutional sentiment remains cautious
• Sentiment is extremely pessimistic, but no guarantee of a strong rebound

K33, a crypto research and brokerage firm, reports that Bitcoin’s current market structure is entering a “late bear market zone.” Its derivatives positioning, ETF fund flows, and macro indicators show striking similarities to late 2022. While this suggests the market may be near the bottom, a long and slow consolidation phase is more likely than a quick rebound.

Market Structure Mirrors Late 2022 Bear Market Features

Vetle Lunde, head of research at K33, states that their “regime indicator,” which combines derivatives yields, open interest, ETF flows, and macro factors like the US yield curve, shows conditions highly consistent with September and November 2022—periods when the previous bear market was approaching its global bottom.

These signals include: funding rates remaining negative for over 11 days, open interest falling below 260,000 BTC, and investors continuously unwinding long positions. Lunde emphasizes that this defensive positioning, along with decreasing leverage, indicates a low short-term risk of a derivatives squeeze.

Consolidation May Persist, Expected Returns Are Low

Lunde notes that K33’s model heavily relies on derivatives data, which reflects real-time risk hedging demand and risk appetite. Negative yields indicate excess hedging demand, while declining open interest suggests traders are exiting rather than betting on a direction. Historical data shows that in such highly similar regime environments, average 90-day returns are around 3%, or even slightly negative in moderately similar conditions.

Lunde predicts Bitcoin will likely trade within the $60,000 to $75,000 range in the near term. He believes current levels are attractive but advises patience, as similar phases often involve slow price movements and frustrating consolidation.

Trading Activity Cools, Institutional Sentiment Cautious

Lunde adds that recent market activity has cooled significantly: spot trading volume has decreased 59% week-over-week, futures open interest hit four-month lows, and volatility is gradually normalizing, indicating the market is digesting previous losses and seeking stability.

On the institutional side, CME traders remain inactive, with yields and open interest both low, showing a lack of directional confidence. Since October last year, Bitcoin ETFs have seen outflows of about 103,113 BTC, even though prices have fallen nearly 50% during the same period. About 93% of peak exposure remains intact, suggesting institutions are reducing holdings but not liquidating heavily.

Sentiment Is Extremely Pessimistic, But No Guarantee of a Strong Rebound

Finally, the Crypto Fear & Greed Index recently dropped to a historic low of 5, reflecting widespread extreme fear. However, Lunde warns that such sentiment indicators have limited predictive power. Historical data shows that buying Bitcoin during extreme fear yields an average 90-day return of only 2.4%, much lower than the 95% during extreme greed, indicating that fear is not a reliable buy signal.

K33 concludes that Bitcoin’s current regime aligns closely with late-stage bear environments. Downside potential may be limited, but a vigorous recovery is unlikely to happen immediately. This resembles the prolonged stable phase after the 2022 bottom. Investors should prepare for a relatively dull consolidation period.