Bitcoin $BTC$68,541.73 The violent selloff earlier this month could give way to a late bear market phase, but investors should not expect a quick recovery, according to Vetle Lunde, head of research at K33.
“Current conditions closely resemble those of late September and mid-November 2022, periods near the bottom of the bear market that were followed by prolonged consolidation,” he wrote.
At that time, bitcoin was stagnating between $15,000 and $20,000, about 70% below its 2021 high.
Today, bitcoin has settled into a calmer range between $65,000 and $70,000, and K33 Research’s regime model – which combines derivatives data, ETF flows, technical signals and macro signals – suggests the market is approaching a cyclical bottom.
The quiet grind
One of the signs of the period of quiet consolidation is that trading activity has fallen sharply, with speculative excesses completely eliminated.
Spot volumes fell 59% week-over-week, the K33 report notes. Meanwhile, open interest rates on perpetual futures fell to a four-month low and funding rates remained negative overall.
This type of cooling-off period is typical after heavy liquidation cascades, as market participants digest losses and readjust their positioning, Lunde said.
Meanwhile, US-listed Bitcoin ETFs saw a record peak-to-trough decline in exposure of 103,113 $BTC since the beginning of October. Nevertheless, Lunde noted that, given $BTC has retraced almost 50%, more than 90% of the maximum exposure remains in terms of bitcoin.
Sentiment gauges also paint a grim picture, with the “Crypto Fear and Greed” index plunging to an all-time low of 5 last week and languishing below 10 for most of last week.
Crypto Fear and Greed Index (Alternative.me)
Long-term value zone
What does all this mean? Bitcoin is “probably near or at a global bottom, but is set for prolonged consolidation between $60,000 and $75,000,” according to Lunde. Similar historical diets have generated modest results
Nonetheless, for investors with a long-term view, current levels are attractive for accumulation, although patience may be required, he argued.
James Check, onchain analyst and co-founder of Checkonchain, also noted that Bitcoin’s sideways periods are a positioning opportunity.
He said that bitcoin, most of the time, “does nothing,” and then tends to move through strong revaluation spurts rather than consistent trends. These explosive phases are often concentrated in a handful of trading days, often at the beginning of a bull cycle and then moving into later stages.
“Most of the time it doesn’t do anything, and then sometimes it goes up 100% in one quarter, and if you’re not there during that quarter, you kind of miss the whole ride.”
He cautioned investors against trying to time the ups and downs perfectly because they often miss the initial rise.
In other words, prolonged consolidation may seem frustrating, but historically the market has rewarded patient positioning rather than fixing the timing.
