K33 Research says Bitcoin traders are currently unusually defensive, a positioning that may be helping limit the risk of the kind of leverage-fueled breakdowns seen in previous bear markets.
Bitcoin BTC $77,190.69 recently failed to break above its key moving average near $83,000, reigniting concerns that another sharp downside move could follow.
However, K33 argued in a Tuesday report that the current cycle is unfolding very differently compared with the 2014, 2018, and 2022 downturns, when similar technical rejections were followed by violent selloffs.
In those earlier bear markets, Bitcoin typically rebounded toward the 200-day moving average before quickly reversing lower again, as rising leverage and increasingly bullish positioning eventually unwound in abrupt cascades. This time, K33 says that pattern has not materialized.
“The current slow grind has not produced such a dynamic,” wrote K33 head of research Vetle Lunde, adding that derivatives data instead points to “uniquely pessimistic sentiment.”
One key indicator is Bitcoin’s funding rate, which has remained negative for 81 straight days on a 30-day average basis — approaching record levels and signaling that traders have consistently maintained a bearish bias even during price recoveries from February lows near $60,000.
At the same time, CME Bitcoin futures annualized basis recently slipped below 2.5%, a level typically associated with heightened caution and subdued bullish positioning.
Despite this defensive setup, K33 also flagged potential risks. Open interest in Bitcoin derivatives remains elevated, increasing the chance of a volatility spike if prices come under renewed pressure. In addition, U.S. spot Bitcoin ETFs have seen $1.6 billion in outflows over five days as prices drifted toward the $83,000 zone, near the average cost basis for many ETF investors.
Historically, K33 noted, investors tend to sell more aggressively when prices rebound toward breakeven levels after extended drawdowns — a behavior that may be re-emerging in the current market environment.
Even so, the firm said its proprietary indicators still resemble stronger phases such as the March–April 2025 period, when Bitcoin bottomed during the tariff-related market shock before rallying to new highs, rather than typical bear market relief rallies seen in prior cycles.
K33 maintains that Bitcoin’s February drop toward $60,000 likely represents the deepest drawdown of the current cycle.
“The less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026,” Lunde wrote, adding that the firm’s base case is that the $60,000 level marked the cycle’s maximum downsid
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