While recent price movements show a "worrying similarity" to sell-offs in 2018 and 2022, a steep drop of 80% from the highs is unlikely. This is stated in a report by K33 Research analyst Vetle Lunde.
Bitcoin has fallen about 40% from its October 2025 peak of around $126,000. In just the past week, amid rising global risk aversion, the asset lost 11%, the expert noted.
This market scenario might evoke memories of previous deep corrections within four-year cycles. Lunde believes the current situation differs from past significant downturns due to institutional adoption, regulated inflows of products, and easing interest rates.
However, concerns about a cycle repeat could become self-fulfilling, the analyst warned. Currently, long-term holders are reducing positions to lock in some profits, while new capital hesitates to enter the market, increasing selling pressure.
Even in this environment, K33 does not expect a deep correction similar to past bear markets. This is supported by a positive macroeconomic backdrop and the absence of "dangerous" players like FTX or Terra.
Is the Bottom Approaching?
At the same time, several indicators traditionally associated with market bottoms have begun to emerge. On February 2, the percentile of Bitcoin's spot trading volume exceeded 90 at over $8 billion. Concurrently, following a wave of long position liquidations in the derivatives markets, open interest and funding rates fell into extremely negative territory.
The combination of these factors has historically coincided with trend reversals, Lunde explained. However, these signals are not definitive: similar extreme values have been observed during "false" rallies and pauses in the middle of cycles.
According to the expert's calculations, a critical support zone is around $74,000. A break below this level could accelerate the downward movement toward the November 2021 peak of around $69,000. In the longer term, a pullback could continue to the 200-week moving average near $58,000.
"We will react quickly if the current support level is breached, but we do not expect a repeat of the 2018 or 2022 situation. Instead, we view current prices as attractive entry points for any long-term investor," Lunde emphasized.
Recall that analyst Ted Pillows pointed out that the Bitcoin price on the weekly chart has dropped below the 100-WEMA. Previously, this signal preceded significant declines.