Bitcoin’s rejection near its 200-day moving average has renewed pressure, but K33 says the market still differs from past bear-market rallies.
Summary
- Bitcoin’s February low near $60K remains K33’s base case for this cycle’s deepest drawdown now.
- K33 says weaker leverage and bearish derivatives positioning make this recovery unlike past bear-market rallies.
- Recent ETF outflows show defensive positioning as Bitcoin trades near average spot ETF cost basis.
Bitcoin has struggled since revisiting its 200-day moving average near $82,000 earlier in May. The move revived concern that the latest recovery could fail like the rebounds seen in 2014, 2018 and 2022, when rallies into the same indicator came before new cycle lows.
K33 Head of Research Vetle Lunde said the current setup does not match those periods. Bitcoin took 189 days between its November break below the 200-day moving average and the May retest, far longer than the 96, 132 and 85 days seen in earlier cycles. Lunde wrote,
“Past rallies recovered quickly, rebuilding risk appetite and leverage and setting up the unwind that fueled the next leg lower. The current slow grind has not.”
ETF outflows show defensive positioning
K33 said the market still lacks the heavy leverage build-up that often appears before a deeper sell-off. The firm also pointed to 13F filings, which showed institutional investors cut Bitcoin exposure by 26,733 BTC in the first quarter, while retail investors added 19,395 BTC.
Separate market updates show the same defensive tone. U.S. spot Bitcoin ETFs recorded more than $1 billion in cumulative weekly outflows as Bitcoin fell below $77,000, while liquidations across crypto topped $661 million. A day later, the products posted $648.6 million in net outflows, the largest single-day withdrawal since Jan. 29, with BlackRock’s IBIT accounting for $448.3 million.
Bitcoin traders remain cautious near cost basis
K33 also said heavy ETF withdrawals have become more common when Bitcoin trades close to the average cost basis for ETF buyers. Lunde said investors often try to avoid losses or limit losses after deep drawdowns when price returns to that area.
The firm kept its central view unchanged despite the recent weakness. Lunde said, “We maintain our view that the less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026,” adding that February’s $60,000 low remains K33’s base case for the cycle’s maximum drawdown.
Meanwhile, Bitcoin traded near $77,400 on May 20, according to crypto.news, down about 4.2% over seven days.
The asset also remains far below its October 2025 record high of about $126,080, showing that the recovery has not fully repaired market confidence.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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