Bitcoin has dropped significantly in recent weeks, weighed down by structural selling pressure that shifted market dynamics.
Bitcoin News
Bitcoin's steepest correction since the last bear market may be ending, with K33 Research pointing to December as a potential turning point for the cryptocurrency.
Analyst Vetle Lunde said the firm sees more evidence supporting a rebound than another collapse. Bitcoin has dropped significantly in recent weeks, weighed down by structural selling pressure that shifted market dynamics.
Spot Bitcoin exchange-traded funds, which had been the market's largest buyers, turned into net sellers during November. CME futures activity fell to a multi-year low, signaling hesitation from traditional finance participants. Bitcoin has underperformed equities and reached its weakest level against the Nasdaq since late 2024.
K33 argues the market is overreacting to distant threats while missing near-term signals of strength. The firm stated that the case for material upside is far more plausible than an 80% drawdown repeat. Bitcoin is trading near strong historical support levels between $70,000 and $80,000, while broader positioning in futures remains cautious rather than overheated.
Perpetual markets show low leverage, and major liquidations have not materialized despite ongoing price pressure. K33 notes that positioning data suggests traders are not overly extended, which reduces the risk of cascading forced selling.
Long-term concerns including quantum computing risks, potential Bitcoin sales by Strategy, or instability at Tether may sound dramatic but are unlikely to materialize soon. K33 emphasized that each of these threats is years away from posing real risk and should not be driving current price movements.
The firm believes focus should shift to what lies ahead in the near term. Supportive policy changes are on the horizon, including possible 401(k) access to crypto, and a pro-crypto shift at the Federal Reserve. K33 sees structural upside building as these developments approach.
Bitcoin's current valuation reflects fear more than fundamentals, according to the research firm. The disconnect between price action and underlying conditions suggests the market is pricing in worst-case scenarios that may not play out.
For now, the market remains cautious as participants assess whether the correction has run its course. K33's outlook suggests December may offer a window for positioning ahead of potential policy catalysts and improved sentiment in early 2026.
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