marketcycles

Market structure across derivatives and positioning data suggests that Bitcoin may be entering a phase similar to the final stretch of the 2022 bear market, according to a new report from research and brokerage firm K33.
Rather than signaling an imminent breakout, analysts argue the current setup resembles a slow accumulation environment — historically marked by stabilization and gradual recovery, not explosive upside.
Regime Indicator Mirrors September–November 2022
K33’s Head of Research Vetle Lunde points to the firm’s proprietary “regime” indicator, which aggregates derivatives yields, open interest trends, ETF flows, and macro variables such as the U.S. yield curve.
According to the report, current readings show strong similarity to September and November 2022 — periods that formed near the cycle bottom. However, history shows that after those lows, Bitcoin entered months of sideways consolidation before any sustained bullish momentum developed.
The implication: structural damage may already be absorbed, but patience could be required.
Derivatives Show Defensive Positioning
Bitcoin has declined nearly 28% since January. In derivatives markets, defensive signals are evident:
Funding rates have remained negative for more than 11 consecutive days.
Aggregate notional open interest has dropped below 260,000 BTC.
Market-wide leverage has meaningfully declined.
Negative funding suggests elevated hedging demand, while falling open interest reflects position closures rather than aggressive new directional bets. Lower leverage also reduces the probability of short-term squeeze-driven volatility spikes.
K33 places significant weight on derivatives data, viewing it as a real-time gauge of risk appetite. The current structure aligns with prior late-bear environments — but lacks the ingredients for a sharp V-shaped recovery.
Historical Returns Suggest Slow Grind Higher
Historical analogs show that when regime similarity is high, the average 90-day forward return is modest — around 3%, and slightly negative in moderate-similarity cases.
K33 projects Bitcoin could range between $60,000 and $75,000 for an extended period. Current levels may be relatively attractive for long-term accumulation, but expectations of rapid upside may be unrealistic under present conditions.
Cooling Activity Across Spot and Futures
Trading activity has also cooled sharply. Spot volumes declined 59% week-over-week, while futures open interest fell to a four-month low. This pattern typically emerges after liquidation events, when markets transition from forced deleveraging to stabilization.
Volatility metrics are normalizing, reinforcing the thesis of a calmer, range-bound environment.
Institutional Participation Remains Cautious
On Chicago Mercantile Exchange (CME), institutional positioning remains muted, with subdued open interest and yields reflecting limited directional conviction.
Bitcoin ETP products have recorded a record reduction of over 103,000 BTC in holdings since their October peak. However, roughly 93% of peak exposure remains intact — indicating risk trimming rather than full-scale institutional exit.
Meanwhile, crypto sentiment gauges have dipped into extreme fear territory. Yet historical data suggests that buying during extreme fear has produced only modest average 90-day returns of roughly 2–3%, far below euphoric-phase performance.
A Bottoming Process — Not a Breakout Catalyst?
K33 concludes that Bitcoin exhibits many characteristics of a late-stage bear market: downside risk may be more limited compared to earlier capitulation phases, but recovery is likely to be gradual and accumulation-driven, similar to the post-2022 bottom environment.
The key question now:
Is Bitcoin quietly building a foundation for the next cycle — or are traders underestimating how long consolidation could last?
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