Research and Brokerage Firm K33 Shares Its Predictions for What’s Next in Bitcoin! Here Are the Details

Research and brokerage firm K33 reported that Bitcoin’s current market structure resembles the final stages of the 2022 bear market, suggesting that a prolonged period of sideways movement is more likely than a sharp short-term surge.

According to a report published by K33 Research Director Vetle Lunde, the company’s “regime indicator,” which includes macroeconomic data such as derivatives yields, open interest, ETF flows, and the US yield curve, shows “strikingly strong similarities” between September and November 2022.

These periods coincided with the time near the global bottom of the 2022 decline. However, Lunde pointed out that although a bottom formed around that time, it was followed by a long period of low-yielding and tedious consolidation.

The report notes that Bitcoin has fallen by approximately 28% since January, highlighting the prevalence of defensive positioning in the derivatives market. It states that funding rates have been negative for 11 days, open positions have fallen below 260,000 $BTC, and investors are closing their long positions. According to K33, reduced leverage also lowers the risk of sharp “squeeze” movements stemming from derivatives.

The company noted that the model placed the greatest weight on derivative data and, while similar to the current regime’s bottoming out, did not support the possibility of a rapid recovery. K33 stated that Bitcoin could trade between $60,000 and $75,000 for an extended period, and while current levels might be attractive, investors should be patient.

Other key findings in the report included a 59% weekly drop in spot trading volumes, futures open positions falling to their lowest levels in four months, and a normalization of volatility. On the institutional side, CME trading remained weak, while Bitcoin ETPs experienced a record drop of 103,113 $BTC since October.

K33 emphasized that a bottoming out in the fear index alone is not a strong signal of a rally, concluding that a recovery may take time.

*This is not investment advice.