The question that has haunted crypto markets since Bitcoin peaked at a record high last October may finally have a definitive answer. According to a new research note from Norwegian crypto analytics firm K33 Research, the bear market’s worst is likely behind us — and it bottomed at $60,000 in February.
K33 Research argued in a Tuesday report that this cycle is behaving very differently from the crashes of 2014, 2018, and 2022, and that its base case remains that bitcoin’s February drop to $60,000 marked the deepest drawdown of the cycle. The implication is significant: after months of uncertainty and cascading sell-offs, the firm is staking its analytical credibility on the view that crypto’s most punishing chapter is over.
A 52% Drawdown — Severe, But Historically Modest
The “maximum drawdown” in K33’s base case sits at the February low of approximately $60,000 — a roughly 52% decline from the all-time high of $126,272 reached on October 6, 2025. While that figure would send shockwaves through most asset classes, it is, by Bitcoin’s own standards, a relatively contained correction.
Previous bear markets saw 78–84% peak-to-trough declines. The current drawdown of roughly 45–52% is significant but structurally less severe. To put that in concrete terms: the 2022 bear market erased nearly 78% of Bitcoin’s value from peak to trough, collapsing from around $69,000 to below $16,000. Recovery from that cycle took 28 months, eventually reaching $68,000 again in March 2024, driven by spot Bitcoin ETF approvals. The 2026 downturn, if K33’s analysis holds, would represent one of the most historically restrained Bitcoin corrections on record.
Vetle Lunde says Bitcoin may stay between $60K and $75K as market conditions resemble the late-2022 bear market.
The Derivatives Signal: 81 Days of Bearish Positioning
The cornerstone of K33’s thesis rests not on price action, but on derivatives data — specifically, the behavior of perpetual swap funding rates.
Bitcoin’s 30-day average funding rate has now stayed negative for 81 consecutive days, nearing its record longest stretch, showing traders have consistently leaned bearish even as prices recovered from the February lows near $60,000. Meanwhile, annualized basis on CME Bitcoin futures recently dropped below 2.5%, levels typically associated with periods of extreme caution.
K33 Head of Research Vetle Lunde characterizes this dynamic as paradoxically bullish. When bearish sentiment becomes so entrenched and widespread, it tends to exhaust its own momentum. There simply aren’t enough fresh sellers left to sustain a prolonged collapse. Lunde described the sentiment as “uniquely pessimistic” in the current market cycle, and said this setup may reduce further downside by exhausting selling pressure early.
Bitcoin 1H Price Chart (Source: CoinMarketCap)
Why This Cycle Breaks the Historical Script
K33’s argument hinges on a critical structural difference from prior bear markets: the absence of aggressive leverage rebuilding.
In prior cycles — 2014, 2018, and 2022 — bitcoin rallied aggressively back toward the 200-day moving average before quickly rolling over again. Those rebounds were fueled by rapidly rebuilding leverage and bullish positioning that eventually collapsed under their own weight. The pattern created a dangerous feedback loop: leverage came back too fast, sentiment overcorrected, and the next leg down was devastating.
Bitcoin took 189 days between its November break below the 200-day moving average and the May retest, far longer than the 96, 132, and 85 days seen in earlier cycles. Lunde wrote that past rallies “recovered quickly, rebuilding risk appetite and leverage and setting up the unwind that fueled the next leg lower.” The 2026 cycle has not followed that playbook.
K33’s proprietary indicators still resemble stronger periods, like the March–April 2025 period as BTC bottomed amid Trump’s tariff rollout before rallying to fresh highs, more than the bear market rallies of prior cycles.
Institutional Architecture as a Price Floor
A second structural argument involves the growing role of institutional capital. Spot Bitcoin ETFs, regulated custody solutions, and stablecoin frameworks — including the GENIUS Act passed in 2025 — provide structural support that did not exist in previous winters. The ETF cost basis around $80,000, K33 and other analysts note, may itself function as a de facto price floor that prior cycles simply lacked.
Following the latest set of 13F disclosures, Q1 positions are now public, with institutional participants reducing their BTC exposure by 26,733 BTC, while retail participants increased it by 19,395 BTC, according to K33’s data. The rotation — institutions trimming, retail absorbing — is consistent with a market in late-cycle consolidation rather than freefall.
That said, the risks are real. Open interest across bitcoin derivatives remains elevated, raising the risk of another volatility event if prices weaken further. Meanwhile, U.S. bitcoin ETF outflows accelerated to $1.6 billion in five days as prices softened near the $83,000 area, close to the average cost basis of many bitcoin ETF holders.
Total Bitcoin Spot ETF Net Inflow (USD) (Source: Coinglass)
What Comes Next
K33’s base case is neither a moonshot nor a meltdown. Lunde said bitcoin could remain rangebound between $60,000 and $75,000 for a prolonged period. The firm characterizes this as a “slow grind” — a grinding consolidation rather than a sharp capitulation or a swift recovery.
Bitcoin traded near $77,400 on May 20, according to crypto.news, down about 4.2% over seven days. For traders watching key technical levels, bitcoin must reclaim and hold above its 200-day moving average near $83,000 to signal a structural shift. Until then, the market remains in contested territory.
For long-term holders, however, the message from K33 is relatively reassuring. “The less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026,” Lunde wrote, with the firm’s “base case” remaining that $60,000 in February marked the bear market’s “maximum drawdown.”
If that analysis proves correct, the dominant question for Bitcoin markets has already quietly shifted — not how low can it go, but how long before it climbs again.
