Bitcoin's recent selloff may signal a late-stage bear market phase, but a quick recovery is unlikely, according to Vetle Lunde, head of research at K33. He notes current conditions mirror September and November 2022, periods near the bear market bottom followed by extended consolidation.
At that time, Bitcoin traded between $15,000 and $20,000. Today, it hovers between $65,000 and $70,000. K33's regime model, which analyzes derivatives, ETF flows, technicals, and macro signals, indicates the market is approaching a cyclical trough.
Trading activity has significantly dropped, with spot volumes falling 59% week-over-week. Perpetual futures open interest reached a four-month low, and funding rates are negative. This cooling-off period is typical after heavy liquidation as market participants digest losses and reset positions.
Sentiment gauges show the "Crypto Fear and Greed" Index at an all-time low of 5 last week. Lunde believes Bitcoin is likely near a global bottom but anticipates a prolonged consolidation phase between $60,000 and $75,000. Historically, such periods have delivered muted returns.
Despite this, Lunde suggests current levels are attractive for long-term investors looking to accumulate, though patience will be crucial. Onchain analyst James Check emphasizes that Bitcoin often experiences sideways periods before sharp repricing bursts, advising against trying to perfectly time market tops and bottoms.