K33 Research stated that Bitcoin's drop towards $67,000 indicates the market is entering a more challenging phase. The firm believes that recent funds continue to flow into AI stocks, while the crypto market faces pressure from cooling institutional demand, continued outflows from spot ETFs, and a weakening derivatives positioning structure.
ETFs continue to see outflows
The report states that over the past three weeks, spot Bitcoin ETFs have seen a total outflow of 62,794 BTC, marking the second-largest consecutive outflow period in history. K33 believes this selling pressure accelerated further after Bitcoin failed to break through the 200-day moving average last month.
In contrast, major US stock indices remain at high levels. The Nasdaq and S&P 500 continue to hit new highs, and the market is also focused on potential IPOs of companies like SpaceX and Anthropic. K33 believes this increases the opportunity cost of holding Bitcoin, leading some funds to shift towards AI-related stocks.
The $60,000 low indicates a loosening trend.
K33 previously predicted that Bitcoin's drop to around $60,000 in February might have been the deepest pullback in this cycle. A key factor supporting this judgment at the time was the unusually low funding rates in the perpetual contract market, indicating heavy short positions and creating conditions for a subsequent short squeeze.
This pattern subsequently propelled Bitcoin to around $83,000, but the rally ultimately stalled near the 200-day moving average. K33 now states that the signals in the current derivatives market are significantly different from before.
Warning signs appear in derivatives positions
The report shows that CME Bitcoin futures open interest has fallen to its lowest level since October 2023, reflecting institutional traders reducing their exposure. Meanwhile, during the Bitcoin decline, perpetual contract funding rates and open interest rose simultaneously, indicating that leveraged long positions are still accumulating against the trend.
K33 believes that such leveraged long positions could create potential selling pressure and expose the market to further downside risks. While the institution hasn't completely abandoned its assessment that $60,000 is the low point for this round, its overall stance has clearly shifted towards caution.
- Over the past three weeks, spot ETFs have seen outflows of 62,794 BTC.
- CME Bitcoin futures open interest fell to its lowest level since October 2023.
- Bitcoin's previous rebound encountered resistance near the 200-day moving average.
K33 still believes that Bitcoin is undervalued relative to stocks in the longer term. However, with insufficient new capital inflows and continued reduction in existing holdings, the short-term market environment has weakened significantly compared to several weeks ago. The institution expects Bitcoin to remain highly volatile this summer.
