Bitcoin’s sharp decline toward the $60,000 level last week may have marked a local bottom, according to research and brokerage firm K33. The firm argues that a cluster of “capitulation-like conditions” emerged simultaneously across spot, ETF, and derivatives markets during the recent sell-off.
In a report released Tuesday evening, K33 Head of Research Vetle Lunde highlighted what he described as “a series of extreme outlier signals” shaping the downturn. Among the most notable developments: trading volumes surged into the 95th percentile historically, funding rates plunged to their lowest levels since the U.S. banking crisis in March 2023, and options skew reached defensive extremes last observed during the most stressed phases of the 2022 bear market.
Momentum Indicators Flash Rare Oversold Signals
Momentum metrics also entered historically rare territory. Following a sustained selling streak beginning January 20, Bitcoin’s daily Relative Strength Index (RSI) dropped to 15.9 — the sixth most oversold reading since 2015.
For context, only March 2020 (COVID crash) and November 2018 (late-stage bear market capitulation) recorded lower RSI levels. RSI measures the speed and magnitude of recent price movements on a 0–100 scale, with readings below 30 generally considered oversold.
According to Lunde, both previous instances coincided with major cyclical bottoms, reinforcing the argument that the recent flush toward $60,000 could represent a short-term capitulation event rather than the start of a prolonged breakdown.
Sentiment data tells a similar story. The Crypto Fear & Greed Index dropped to 6 during the sell-off — the second lowest reading on record — signaling extreme pessimism as Bitcoin tested the $60,000 region.
Explosive Trading Activity and Derivatives Stress
The price decline was accompanied by what Lunde described as “hyperactive” trading conditions. Spot Bitcoin trading volume reached $32 billion on February 6 alone, placing both February 5 and 6 within the top 5% highest-volume days in Bitcoin’s history.
Such clustered volume spikes are statistically rare and have historically aligned with local price extremes. The only comparable episode in the past five years occurred during the FTX collapse.
In derivatives markets, stress levels escalated significantly. The daily annualized funding rate for Bitcoin perpetual swaps dropped to -15.46% on February 6 — the lowest since March 2023. Meanwhile, the 7-day average funding rate declined to -3.5%, marking its weakest level since September 2024.
Options markets also shifted into an “extreme defensive posture.” Skew metrics reached levels comparable to those observed during the Luna collapse, 3AC liquidations, and the FTX failure — periods characterized by forced deleveraging and panic hedging.
Record ETF Activity Reflects Volatility
U.S. spot Bitcoin ETFs also recorded extraordinary activity. BlackRock’s IBIT posted its highest-ever daily trading volume on February 5, surpassing $10 billion with 284.4 million shares traded.
However, the same day marked the fifth-largest net outflow since ETF launches. Although inflows returned in subsequent sessions, total net outflows for the week reached approximately 13,670 BTC as of last Tuesday.
This combination of record trading volume, heavy ETF flows, extreme funding compression, and defensive options positioning contributes to K33’s assessment that the $60,000 zone likely represents a statistically significant bottom region.
Consolidation Phase Expected
Looking ahead, K33 anticipates Bitcoin may transition into a sideways accumulation phase lasting several weeks or even months. The firm expects price action to likely fluctuate within a $60,000–$75,000 range.
While volatility and trading intensity may gradually cool, the probability of a retest of the $60,000 support zone remains elevated. That said, K33 does not currently anticipate a materially deeper breakdown below the recently established lows.
As always, market structure remains dynamic, and liquidity conditions, macro developments, and ETF flows will continue to influence short-term price behavior.
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making financial decisions.
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