Bitcoin’s continued sell-off has revived fears that the market is slipping again into a well-known four-year cycle sample, whilst brokerage and analysis agency K33 argues a full repeat of prior bear markets is unlikely.
In a report printed late Tuesday, K33 Head of Analysis Vetle Lunde stated bitcoin is down roughly 40% from its October peak, with final week alone delivering an 11% drawdown amid heightened international danger aversion.
Cycle fears return
Lunde, who beforehand pushed again on inflexible cycle narratives, stated latest value motion is exhibiting “unsettling similarities” to the deep sell-offs seen in 2018 and 2022.
He beforehand wrote:
“Rhe 4-year cycle is useless, lengthy dwell the king”
Lunde argued that cycle fears can grow to be self-fulfilling as long-term holders trim publicity to guard beneficial properties and new capital hesitates to enter.
Why K33 says this cycle could differ
Regardless of the similarities in market habits, Lunde stated the backdrop has modified resulting from rising institutional adoption, regulated product inflows, and an easing charge surroundings.
He stated:
“This time is totally different”
Lunde added he doesn’t anticipate a 365-day peak-to-trough drawdown of 80% like prior cycle collapses, citing the absence of pressured deleveraging occasions that amplified losses throughout the 2022 credit score unwind.
Backside indicators, however not definitive
Lunde stated a number of indicators related to market bottoms have began to flash.
On Feb. 2, bitcoin logged a Ninetieth-percentile spot buying and selling day with greater than $8 billion in quantity as costs revisited 2025 lows.
Derivatives positioning additionally turned sharply risk-off, with open curiosity and funding charges falling into excessive unfavorable territory after roughly $1.8 billion in lengthy liquidations.
Lunde cautioned:
“With BTC nearing a flat return profile over the previous two years, we sense no urgency for long-term holders to promote.”
K33 highlighted the $74,000 space as key help, warning a break might open a transfer towards the November 2021 peak close to $69,000 or the 200-week transferring common round $58,000.