K33 Warns of Bitcoin Liquidity Drop Ahead of Easter

K33 analysts have observed a significant increase in short positions for Bitcoin through ETFs, rising by 22% to reach 9,012 BTC, a level seen only twice before in history.

Vetle Lunde, the firm's research head, explained that this trend aligns with typical bottom formation phases, indicating a market saturated with bearish sentiment, further evidenced by ongoing negative funding rates.

“The average annualized 30-day funding rates have remained negative for 32 consecutive days. In another two weeks, this period may exceed the duration of the negative rates observed from November to December 2022,” he noted.

Additional on-chain metrics reveal a potential cyclical minimum for Bitcoin. CryptoQuant reported that the disparity between Bitcoin's spot and realized prices has decreased from 120% at the end of 2024 to just 21% now. The asset would need to decline roughly 20% more to enter the accumulation zone, historically linked to market bottoms.

Liquidity Constraints During Holiday Periods

K33 pointed out that Bitcoin traders are exhibiting "aggressive caution" amid weak price trends and uncertainties, including geopolitical tensions and emerging quantum threats. The upcoming Easter holiday is expected to exacerbate liquidity issues, as many markets will be closed.

Historically, Bitcoin trading volumes during the Easter week have been below the annual average since 2019, with volatility also tending to decrease during this period, according to Lunde.

As of now, Bitcoin is trading around $68,600, marking the first quarter of 2026 as the worst for the asset in the past eight years. Analysts at Fidelity noted that Bitcoin's 52% decline from its all-time high could signify market maturation.