Why does K33 think this bitcoin bear market is different?

K33 Research said traders remain unusually pessimistic even after bitcoin recovered from February lows near $60,000. In previous bear markets, rebounds were driven by aggressive leverage that later collapsed, but K33 said current positioning looks much more defensive.

What happened to bitcoin near the $83,000 level?

Bitcoin recently failed to break above its 200-day moving average near $83,000, which revived fears of another major sell-off. Traders often view the 200-day moving average as an important long-term trend indicator.

Why are negative bitcoin funding rates important right now?

K33 said bitcoin’s 30-day average funding rate stayed negative for 81 consecutive days, showing traders remain heavily bearish. Negative funding rates usually mean short sellers are dominant, which can sometimes happen near market bottoms instead of euphoric tops.

What does K33 think was bitcoin’s deepest drawdown this cycle?

K33 said its base-case scenario remains that bitcoin’s February decline toward $60,000 was the maximum drawdown for the current cycle. The firm believes downside risk may now be more limited compared with previous crypto bear markets.

What is different from the 2014, 2018 and 2022 bitcoin crashes?

K33 said previous bear market rallies were fueled by traders rapidly rebuilding leverage and bullish bets before markets rolled over again. This cycle, the research firm said traders have stayed cautious instead of becoming overly optimistic.

What warning signs is K33 still watching in the bitcoin market?

The firm said open interest across bitcoin derivatives remains elevated, which could still trigger volatility if prices weaken further. K33 also pointed to $1.6 billion in US bitcoin ETF outflows over five days as another sign of investor caution.

Why are bitcoin ETF outflows important for traders?

Bitcoin ETF outflows can signal weakening institutional demand or investors reducing exposure during uncertain market conditions. K33 noted many ETF holders bought near current price levels, increasing the chance of selling pressure around breakeven levels.

What did Vetle Lunde say about current bitcoin sentiment?

Vetle Lunde said derivatives data points to “uniquely pessimistic sentiment” rather than speculative excess. That suggests traders are still positioned defensively despite bitcoin stabilising above February lows.

Cryptocurrency

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K33 says Bitcoin bear market differs

Written by Brie CarterPublished May 20, 2026, 3:45 AM

K33 Research said bitcoin’s current market structure differs significantly from prior bear markets because traders remain unusually defensive despite the cryptocurrency’s recovery from February lows near $60,000.

The research firm said bitcoin’s recent rejection near its 200-day moving average around $83,000 revived fears of another major downturn, but derivatives positioning continues to resemble market bottoms rather than temporary bear market rallies.

“The current slow grind has not produced such a dynamic,”

Said Vetle Lunde, adding:

“Derivatives data instead points to uniquely pessimistic sentiment.”

K33 said bitcoin’s 30-day average funding rate has remained negative for 81 consecutive days, nearing a record streak and showing traders have consistently leaned bearish even as prices rebounded from February lows.

The firm also noted annualised basis on CME bitcoin futures recently fell below 2.5%, levels historically associated with periods of extreme caution, while open interest across bitcoin derivatives remains elevated and US bitcoin ETF outflows accelerated to $1.6 billion over five days, with bitcoin trading near the average cost basis of many ETF holders.

K33 said previous bear market rallies in 2014, 2018 and 2022 were driven by rapidly rebuilding leverage and bullish positioning that later collapsed, while current market conditions appear more restrained and less vulnerable to forced liquidations.

The research firm added that its proprietary indicators still resemble stronger periods such as March and April 2025, when bitcoin bottomed during tariff-related volatility before rallying to new highs, with K33 maintaining its base-case view that February’s drop toward $60,000 marked the cycle’s maximum drawdown.

“The less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026,”

Lunde wrote.

At the time of reporting, Bitcoin price was $76,700.86.