Bitcoin Volatility Sparks Cyclical Market Debate
Bitcoin's recent drop of about 40% from its all-time high has reignited discussions about cyclical downturns. While chart patterns resemble previous bear market phases, K33 research indicates the current environment differs significantly from the 2018 and 2022 cycles, making an 80% drawdown unlikely.
Structural Differences Define Current Market
K33's research head Vetle Lunde notes that despite similar price action, today's market shows stronger institutional participation, steady inflows into regulated products, and a more accommodative interest rate environment. Unlike previous cycles, the current downturn lacks systemic deleveraging risks that characterized the 2022 collapse.
Early Bottoming Signals Emerge
Lunde highlights emerging bottoming signals from spot volume and derivatives market stress indicators, though not yet conclusive. He identifies $74,000 as a critical support level, with potential downside to $69,000 or $58,000 near the 200-week moving average if breached. Overall, K33 views current levels as attractive entry points for long-term investors.