K33 Research believes the market has become overly pessimistic as bitcoin approaches critical support levels, arguing that December may offer a compelling setup for investors willing to take calculated risks.
Bitcoin’s sharp pullback has rattled sentiment, but analyst Vetle Lunde says the decline is more likely to mark the end of a correction than the start of a deeper slide. Following its steepest drop since the previous bear market, K33 sees stronger evidence pointing to a rebound than to another major downturn.
The latest downswing has been driven largely by structural headwinds. Spot bitcoin ETFs, once the strongest source of daily demand, flipped to net selling throughout November. Institutional activity has also thinned, with CME futures volumes falling to their lowest point in years. On a relative basis, bitcoin has underperformed equities, sinking to its weakest level versus the Nasdaq since late 2024.
Still, K33 argues that traders are fixating on remote risks rather than paying attention to nearer-term strengths. “The odds of notable upside are far greater than the likelihood of another 80% crash,” the firm wrote in its December outlook.
Several factors support this stance. Bitcoin is now trading near well-established support between $70,000 and $80,000. Futures markets show restrained positioning rather than excess leverage, and perpetual markets remain unusually calm. Notably, the recent decline has not produced the kind of large liquidation waves typical of major breakdowns.
Long-term fears—ranging from quantum computing concerns to potential MicroStrategy selling or anxieties around Tether—may generate headlines but are unlikely to pose immediate threats. K33 stresses these scenarios lie years away and do not justify the current emotional selling.
Instead, the firm highlights developments that could strengthen the market in the near future. Policy shifts that may open 401(k) access to bitcoin, coupled with an increasingly crypto-supportive Federal Reserve outlook, could help rebuild momentum. In K33’s view, current valuations reflect excessive fear rather than deteriorating fundamentals.
While the market remains cautious for now, K33 suggests that December could present a timely opportunity for investors willing to position ahead of a potential recovery.
