K33: “Signals Bitcoin Is Forming a Bottom…Indicators Similar to Post-FTX Collapse”

An analysis suggests that the Bitcoin (BTC) market may be entering a bottoming phase after a prolonged decline.

According to a report by Decrypt on the 4th (local time), crypto research and brokerage firm K33 said in a report that key technical indicators in the Bitcoin market have recently reached levels similar to those seen during the FTX collapse in 2022.

Vetle Lunde, head of research at K33, wrote in the report, “The worst phase is already behind us. Now is the time to watch the market go through the process of building a bottom,” adding, “Bitcoin’s bottoming phases typically unfold slowly, so patience is required.”

Lunde explained that Bitcoin’s weekly Relative Strength Index (RSI) recently fell to 26.84, the lowest level since July 2022. The RSI is a widely used technical indicator that gauges whether an asset is oversold based on the speed and magnitude of price changes.

He noted, “The current RSI level is similar to the oversold zone that emerged during the wave of collapses among crypto lenders in 2022 and the FTX bankruptcy.”

A similar pattern was also seen in volume indicators. Bitcoin trading volume recently exceeded 95% of the all-time peak volume for two consecutive days. Such a surge in volume has occurred only once in past bear markets—when FTX filed for bankruptcy.

In the derivatives market, investors’ defensive positioning also appeared to have increased. Lunde said, “In the perpetual futures market, investors are paying a significant premium to place downside bets.”

In the options market, the “skew” indicator—where put option prices for downside bets rise above call option prices for upside bets—jumped sharply. This indicator also climbed to levels comparable to those seen during major market shocks in 2022, including the Terra collapse and the FTX bankruptcy.

Lunde stressed that such extreme market stress may in fact be a feature of the bottoming process. He said, “Bitcoin often tends to move against market expectations,” adding, “When bets become excessively crowded in one direction, moves in the opposite direction often follow.”

Bitcoin is currently trading at around $73,000, about 42% below the all-time high of $126,000 recorded in October last year.