K33 said Bitcoin markets are showing a clear defensive bias heading into the Easter holiday period. In its report, the firm pointed to weak price action, ongoing geopolitical risk tied to Iran, and rising discussion around quantum computing threats as the main factors behind the tense setup.
Leveraged short Bitcoin ETF exposure jumps to second-highest level
According to K33 head of research Vetle Lunde, those catalysts have triggered another wave of defensive positioning. Data in the report shows leveraged short Bitcoin ETF exposure has reached 9,012 BTC, up 22% in just a few days and now sitting at the second-highest level on record. The build-up highlights how bearish positioning has become concentrated in a short period.
Lunde also argued that the picture is not one-sided. Funding rates have stayed negative, a sign that short positioning is getting crowded. He said this kind of extreme market structure has matched conditions seen in past bottoming phases.
Negative funding streak extends to 32 days
K33 said the 30-day average annualized funding rate has remained negative for 32 straight days. If that streak lasts another two weeks, it would exceed the longest run recorded during November to December 2022. That leaves the derivatives market tilted toward shorts, and the duration itself has become a notable signal.
Easter period has historically brought weaker volume and volatility
Lunde said traders should also watch for the holiday effect. Many traditional financial markets close on Good Friday and Easter Monday. Crypto trades around the clock, but the report said market liquidity still tends to thin out during that period, with the European session seeing a more visible impact.
K33 compared Bitcoin's seven-day trading volume during Easter week with the average seven-day volume for the full year. Since 2019, Easter trading activity has come in below the annual average every year. The same pattern appears in volatility, with Bitcoin's seven-day volatility measure during Easter also running below the yearly average in each year since 2019.