Bitcoin’s drop to $67,000 may indicate a more challenging market outlook for the summer months. In the latest evaluation published by K33 Research, it was stated that investor capital moved out of crypto assets and towards artificial intelligence-related stocks, which increased the pressure on Bitcoin.
Emphasis on weakening corporate demand
In the report published on Tuesday, Vetle Lunde, Head of Research at K33 Research, said that the weak outlook in Bitcoin is linked to the slowdown in institutional demand, money exiting ETFs and vulnerabilities in derivative markets. K33 Research is known as a research company focusing on digital asset markets.
Vetle Lunde stated that a significant part of the market sees the opportunity cost of carrying Bitcoin as high, while the strong rise in artificial intelligence-related assets continues.
According to the report, this separation has now become more evident. While Bitcoin could not rise above its 200-day moving average again, Nasdaq and S&P 500 indices reached record levels. Lunde argued that expectations of possible public offerings in companies such as SpaceX and Anthropic may also be driving capital away from the crypto market.
Mini dictionary: The 200-day moving average is a technical indicator that shows the average price of an asset over the last 200 days. It is frequently used to track long-term direction in markets and is often considered an important support or resistance level.
ETF outflows attracted attention
One of the areas where capital rotation was most clearly seen was Bitcoin ETFs. In the report, it was stated that 62,794 BTC came out of spot Bitcoin exchange traded products in the last three weeks, and this was one of the second largest outflow series on record.
Selling pressure on the ETF side accelerated after Bitcoin’s failed attempt to break through its 200-day moving average last month, according to K33. This indicated that the technically weakening outlook of the market was also reflected in institutional investor behavior.
The picture has changed in derivative markets
K33 had previously argued that Bitcoin’s decline to around $60,000 in February could be the deepest decline of the cycle. A key basis for this view was unusually negative funding rates on perpetual futures. The company assessed that this reflected strong pessimism in the market and paved the way for harsh short position closings.
As a matter of fact, this outlook contributed to Bitcoin’s trend towards around 83 thousand dollars again. However, the rise stopped at the 200-day moving average level. The report noted that this level was also a threshold that limited the upward movement in past bearish market recoveries.
According to Lunde, the picture in derivative markets today has changed significantly. While the amount of open interest in CME Bitcoin futures decreased to the lowest level since October 2023, this shows that institutional investors reduced positions. In contrast, funding rates in perpetual futures rose with open positions as Bitcoin declined. This indicates the accumulation of leveraged long positions in a weakening market, the report said.
The report emphasized that the hidden selling pressure accumulated in leveraged long positions is a warning for deeper bottoms and that caution should be exercised.
The company has not completely abandoned the view that the $60,000 level is the bottom of this cycle. Despite this, it seems that the language used has become more defensive. While K33 thinks Bitcoin may still be undervalued relative to stocks in the long term, he noted that the short-term outlook has become more difficult than it was a few weeks ago due to a slowdown in institutional demand, an exodus of ETF investors, and capital shifting to stronger performing sectors.
Lunde also said that new capital inflow from outside remained limited, and existing investors reduced their risks. For this reason, the assessment that a more volatile market structure could be seen in the summer months came to the fore.
