K33 Research: Bitcoin Ends Deep Correction, Likely to Rebound in December

Bitcoin has recently experienced its deepest pullback since the last bear market, with market pessimism clearly intensifying. In response, research firm K33 Research believes the market is currently overreacting, with panic sentiment masking substantial support signals, and that December could actually present potential investment opportunities. From leverage levels and support zones to policy outlooks, multiple indicators suggest that Bitcoin is more likely to rebound at this stage rather than suffer another major drop.

Bitcoin experiences deeper correction, market sentiment turns pessimistic

K33 Research analyst Vetle Lunde points out that although Bitcoin’s recent decline has intensified market panic, structurally, a bottom may have already formed. Previously, Bitcoin faced significant selling pressure, including from structural factors:

• Bitcoin spot ETFs, which were previously the market’s largest buyers, have turned into net sellers since November.
• CME Bitcoin futures volume has dropped to multi-year lows, indicating a more cautious stance from traditional financial institutions.
• Bitcoin’s performance relative to the Nasdaq index (Nasdaq) has fallen to its lowest level since the end of 2024.

These factors have collectively magnified market panic.

Market panic is excessive, ignoring short-term support signals

K33 points out that the market now seems more fearful of long-term risks while overlooking strong short-term signals. K33 emphasizes that Bitcoin is currently near the strong historical support zone of $70,000 to $80,000. Futures market positions remain conservative and are not overheated. Perpetual contract leverage is low, and there have been no large-scale liquidations as seen during previous major drops. Therefore, K33 believes:

“Instead of worrying about Bitcoin dropping another 80%, the probability of a rebound is actually much higher.”

Long-term risks that the market worries about do exist, but are still far off

K33 also responds to frequently discussed potential threats, including security risks from quantum computing, the possibility of MicroStrategy (Strategy) selling large amounts of Bitcoin, and potential instability in the stablecoin USDT.

But K33 emphasizes that these are “issues that may pose a threat many years from now” and should not dominate current market price fluctuations.

December could be an inflection point, with multiple short-term bullish factors emerging

K33 believes that the current market price reflects panic more than fundamentals. They highlight several short-term signals of greater importance, such as:

• The US policy environment may become more crypto-friendly.
• US 401(k) retirement plans may open up to crypto asset investments.
• The Federal Reserve (Fed)’s internal attitude toward crypto is shifting toward support.

K33 points out that these “imminent” policy changes are more impactful than long-term risks.

Market remains cautious for now, but December may offer potential investment opportunities

Overall, while the market is still cautious at present, K33 states:

• Bitcoin’s structural support range remains intact.
• Market leverage is not high, and there have been no panic-driven liquidations.
• Policy shifts could provide new momentum for the crypto market.

Therefore, they believe December may present a good opportunity for bold positioning, and the probability of a Bitcoin rebound is quite high.

(Bitcoin 80K may have bottomed out! Arthur Hayes: Fed policy shift could revive the market)

This article, “K33 Research: Bitcoin Ends Deep Correction, May Rebound in December,” first appeared on Chain News ABMedia.