As Bitcoin plunged toward $60,000 last week, research and brokerage firm K33 released a report highlighting a series of “capitulation-like” extreme signals across spot, ETF, and derivatives markets. K33 believes the sharp sell-off has likely formed a high-probability cyclical bottom, with limited risk of breaking significantly below recent lows despite possible consolidation ahead.
Spot and Momentum Indicators: Rare Oversold Levels Reappear
Vetle Lunde, head of research at K33, noted that the downturn was accompanied by multiple anomalous data points. Bitcoin spot trading volumes on two consecutive days in early February hit the 95th percentile historically – a level of extreme volume that has only occurred once in the past five years, during the FTX collapse. Meanwhile, the daily relative strength index (RSI) fell to 15.9, the sixth-lowest reading since 2015. Only the March 2020 COVID crash and the 2018 bear market bottom recorded lower values, both of which marked major cyclical lows.
Lunde explained that when volumes and RSI simultaneously enter such rare extreme territory, it typically signals that market sentiment is approaching full capitulation. This “selling exhaustion” phenomenon often appears near a phase bottom.
Derivatives Pressure: Funding Rates Turn Negative, Options Shift to Defense
Data from the derivatives market also reflects intense pressure. The daily funding rate for Bitcoin perpetual swaps hit its lowest level since the U.S. banking crisis in March 2023; the seven-day average annualized funding rate also dropped to multi-month lows. Deeply negative funding rates indicate that short sentiment has surged, with shorts willing to pay a premium to maintain their positions – a pattern typical of escalating panic.
Options skew entered an “extreme defense zone,” previously seen only during the Luna collapse, the 3AC crisis, and the FTX bankruptcy. This suggests investors are actively buying protective puts to hedge against further downside.
ETF Turmoil: Record Volume Meets Heavy Outflows
U.S. spot Bitcoin ETFs also experienced historic volatility. IBIT recorded a single-day trading volume exceeding $10 billion, an all-time high, while the same day marked the fifth-largest net outflow day since the ETF launched. Although some capital returned in subsequent days, the week still saw net outflows of over 10,000 BTC. K33 noted that sharp ETF outflows often coincide with panicked sentiment, but historically such concentrated selling tends to near the end of short-term pressure.
$60,000 Becomes Key Zone; Consolidation Likely Ahead
Synthesizing multiple extreme data points – including volatility, volume, funding rates, options skew, and ETF flows – K33 considers the $60,000 range to have a “high probability” of being a cyclical bottom. However, the firm expects that Bitcoin is unlikely to immediately resume a strong bullish trend; instead, it may enter a consolidation phase lasting weeks or even months, with prices potentially ranging between $60,000 and $75,000. While retests of support are possible, no clear signs point to a break below recent lows.
K33’s assessment suggests this sharp decline is more of an emotion-driven rapid liquidation than the beginning of a new deep bear market. The key for the market will be whether capital flows and trading momentum gradually stabilize.