Bitcoin took a sharp turn last week, sliding to $60,000 before recovering to around $66,500. The swift decline caught markets off guard, but analysts at K33 Research see a silver lining. Vetle Lunde, Head of Research at K33, pointed to “extreme edge signals” flashing across ETF, spot and derivatives markets, describing conditions akin to capitulation.
Funding Rates and Option Skew Hit Historic Fear Levels
Perpetual swap funding rates plunged to -15.46% on February 6, with the seven-day average falling to -3.5% — a level last seen in September 2024. Option skew surged to stress points that previously only appeared during the depths of the 2022 bear market. Both metrics reflect intense risk aversion, a combination Lunde said was reminiscent of the FTX collapse. He called this an “exceptional period” where multiple indicators are converging.
RSI Hits Deep Low, Fear & Greed Index at 6
Selling pressure since January 20 has pushed Bitcoin's daily RSI to 15.9, the sixth-lowest reading since 2015. Only the March 2020 COVID shock and November 2018 bear-market bottom recorded lower figures. The Crypto Fear & Greed Index plunged to 6, signaling extreme fear. Lunde noted that price action has been defined by “hyperactive trading,” with spot volume hitting a record $32 billion over just two days on February 6.
IBIT ETF Posts Record Volume, Fifth-Largest Net Inflow
BlackRock's iShares Bitcoin Trust (IBIT) saw record activity on February 5, with volume exceeding $10 billion and 284.4 million shares traded. That same day, it recorded its fifth-largest net inflow since launch. Lunde argued that volatility, volume, returns, option curves and ETF flows are all displaying “exceptional figures” that collectively support the case for a local bottom.
K33: Bitcoin Likely Range-Bound Between $60K and $75K
While selling pressure has not fully faded, analysts believe the extreme signals limit further downside. K33 sees Bitcoin trading in a $60,000 to $75,000 range in the near term, with deeper lows considered unlikely. The firm’s conclusion is based on the convergence of historical extremes rather than casual market sentiment.