K33 Research's Vetle Lunde predicts Bitcoin will not experience an 80% drop despite recent declines, citing institutional support.
K33 Research analyst Vetle Lunde has indicated that while Bitcoin's recent price movements bear a concerning resemblance to past sell-offs in 2018 and 2022, an 80% drop from its peak is improbable. Currently, Bitcoin is down approximately 40% from its October 2025 high of around $126,000, with an 11% decline just in the past week, driven by increasing global risk aversion.
Lunde highlights that the current market dynamics differ significantly from previous downturns due to factors such as institutional adoption and regulated product inflows, along with a reduction in interest rates. However, he cautions that fears of a repeat cycle could lead to self-fulfilling prophecies, as long-term holders are cashing out to secure gains and new investors are hesitant, adding to selling pressure.
Despite the current challenges, K33 does not foresee a severe market correction akin to those experienced in earlier bear markets, citing a favorable macroeconomic environment and the absence of destabilizing entities like FTX or Terra.
Market Indicators Suggest Potential Bottom
Several indicators typically associated with market bottoms are beginning to surface. For instance, Bitcoin's spot trading volume surpassed 90 percent on February 2, exceeding $8 billion. Following a wave of liquidations in long positions within derivatives markets, both open interest and funding rates have dropped to significantly negative levels.
Lunde notes that while these factors have historically preceded trend reversals, they are not guaranteed indicators of recovery. He identifies a critical support zone near $74,000; if this level is breached, it could trigger further declines toward the November 2021 peak of approximately $69,000, with a longer-term pullback potentially reaching the 200-week moving average around $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 stated.
Additionally, analyst Ted Pillows has noted that Bitcoin's price has fallen below the 100-week exponential moving average (WEMA), a signal that has historically preceded significant declines.
