Bitcoin
After months of relentless optimism, the Bitcoin bull market has hit its first real wall. The world’s largest cryptocurrency struggled to find its footing in November, dropping to the $100,000 level, a figure not seen since early summer.
Important points:
- Bitcoin’s decline towards $100,000 represents its worst performance since mid-2024.
- K33 Research points to panic selling and liquidity depletion after a record $20 billion liquidation event.
- Despite anxiety dominating sentiment, analyst Betru Lunde sees early signs of a rebound forming.
For traders accustomed to seeing green candles rule the year, the sudden reversal revived an old and familiar emotion: fear.
According to According to K33 Research, this retracement caps what its analysts call a “rotten October”, a month defined by low liquidity and lingering uncertainty due to the largest market liquidation event in crypto history. On October 10th, around $20 billion in leveraged positions were wiped out in a single day, and the aftershocks seem to be still reverberating through the market.
The Great Reckoning Hangover
Vetle Lunde, head of research at K33, describes the current stage as a psychological hangover. “The market is not out of money, it’s out of belief,” he wrote in a recent note. In his view, fear-driven selling by long-term holders is exacerbating the weakness and pushing it higher. Bitcoin A pattern he calls “hesitation trading,” meaning low volume and choppy movements, can lead to nervous emotions.
On-chain data backs it up. More than 319,000 BTC held for six months to a year were reactivated in October, indicating that early adopters and patient investors have started taking profits. A flood of supply is colliding with diluted demand, driving price pressure, even as institutional capital flows, once closely tied to Bitcoin’s performance, have lost short-term influence.
Macro cross-current causes confusion
If that’s not enough, a broader macro picture won’t help. The Fed’s 25 basis point rate cut earlier this month did little to calm investors, overshadowed by concerns about the U.S. government shutdown and the future direction of monetary policy.
Against this backdrop, the correlation between Bitcoin and major benchmarks has reversed. While the Nasdaq and S&P 500 rose 4.8% and 2.3%, respectively, in October, Bitcoin fell about 4%, its lowest monthly relative performance since mid-2024. Even gold, usually a safe bet, rose 3.7% as digital assets lagged.
Are we nearing the bottom?
Despite the gloomy tone, not everyone believes this is the beginning of a long-term downtrend. Lunde argues that Bitcoin’s current move is strikingly similar to what’s been happening after major liquidations in previous cycles: long, tedious sideways moves that quietly wash away leverage before a new rally begins.
His team’s Derivatives Regime Index maps today’s structures against historical patterns, showing elements of both capitulation and recovery. In other words, Bitcoin may be hitting a bottom, even if traders aren’t into it yet.
“Times like this are slow, heavy and frustrating,” Lunde explained. “But they are often a harbinger of new momentum once selling pressure subsides.”
Fear is at its peak and usually bullish
Market indicators seem to agree that sentiment is nearing depletion. CME futures premiums have fallen to levels not seen since the March 2023 banking crisis, and open interest has fallen to its lowest level since April. K33’s sentiment model indicates “extreme fear” dominating trader sentiment, which is usually a contrarian sign that sellers are running out of steam.
Mr. Lunde remains cautiously bullish. Convinced that the worst of the sell-off was over, he switched from altcoins back to Bitcoin. “The charts look terrible,” he acknowledged, “but the fundamentals are not in line with the top. We’re still in a liquidity-friendly world, there’s increasing institutional access to crypto, and we’re not getting out of crypto.”
Why this might just be a reset
From his perspective, Bitcoin’s recent decline is less a collapse and more a reset, a cooling period after months of speculative fever. He notes that broader forces still work in Bitcoin’s favor, including expanded monetary policy, possible access to 401(k) crypto, the participation of Tier 1 banks, and what he calls the “thaw” regulatory environment in the United States.
“This is not a four-year peak situation,” Lunde said. “These are situations where the market is holding its breath.”
If history is any guide, that breath may not last forever. In previous post-liquidation phases, strong recoveries continued as fear gave way to risk-taking. Whether November’s gloom marks the bottom of this year’s economic cycle or just a lull may depend less on macro data and more on when traders decide to believe again.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over eight years of experience covering the crypto, blockchain and fintech industries, he is well-versed in the complex and evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and detailed content. Follow his publications to stay up to date on the most important trends and topics.