K33 sees 'strong case' bitcoin has bottomed amid 'capitulation-like' conditions

Bitcoin's BTC plunge toward $60,000 last week may have marked a local bottom, according to research and brokerage firm K33, which argues that "capitulation-like conditions" emerged across spot, exchange-traded funds, and derivatives during the sell-off.

In a new report late Tuesday, K33 Head of Research Vetle Lunde pointed to a "vast list of extreme outliers" defining the move, including 95th percentile trade volumes, funding rates collapsing to levels last seen during the March 2023 U.S. banking crisis, and options skews rising to levels only observed amid the most intense stress in the 2022 bear market.

Momentum indicators also reached rare territory, the firm noted. After persistent selling since Jan. 20, bitcoin's daily Relative Strength Index (RSI) fell to 15.9 — the sixth most oversold reading since 2015 — with only March 2020 and November 2018 printing lower levels. RSI measures the speed and magnitude of recent price changes, oscillating between 0 and 100.

Both prior episodes coincided with major cycle lows, strengthening the argument that the recent flush could represent a local bottom, Lunde said.

Sentiment gauges reflected similar stress. The Crypto Fear & Greed Index fell to 6 during the sell-off — its second-lowest reading ever — underscoring the depth of pessimism surrounding bitcoin's move toward $60,000.

Hyperactive trading and derivatives stress

The price action was accompanied by "hyperactive trading," Lunde said. Two-day bitcoin spot volume reached $32 billion on Feb. 6, among the highest ever recorded, with back-to-back 95th percentile volume days on Feb. 5 and Feb. 6 — something that has happened only once in the past five years during the FTX collapse — he wrote.

Lunde noted that such outlier days are typically associated with local price extremes, though they are often followed by consolidation and potential retests of local lows.

Meanwhile, derivatives markets mirrored the stress. Daily annualized funding rates in bitcoin perpetual swaps fell to -15.46% on Feb. 6, marking the lowest level since March 2023, while the seven-day average annualized funding rate dropped to -3.5%, its lowest since September 2024, per K33's data.

Options skews also moved into "extreme defensive territory," with comparable readings previously observed during the Luna collapse, the 3AC contagion unwind, and the FTX collapse, Lunde said.

At the same time, U.S. spot bitcoin ETFs saw record activity. IBIT logged its largest-ever daily trading volume on Feb. 5, surpassing $10 billion and 284.4 million shares traded, while Feb. 5 marked the fifth-largest daily outflow since their launch. Despite inflows in subsequent days, net weekly outflows totaled 13,670 BTC since last Tuesday.

Taken together, Lunde said the breadth of extreme readings across volatility, volume, yields, skews, and ETF flows supports $60,000 as a high-probability bottom.

K33 now expects bitcoin to shift into a stagnant consolidation regime lasting weeks or months, likely ranging between $60,000 and $75,000, with subsiding activity and elevated odds of a retest of support but no expectation of material downside below the recently established low.