Bitcoin’s sharp downturn earlier this month may be transitioning into a textbook late-bear-market phase, though investors should not expect a swift rebound, according to Vetle Lunde, head of research at K33.

Lunde said present conditions resemble late September and mid-November 2022 — periods that marked the bottoming process of the previous cycle and were followed by extended sideways trading. At the time, bitcoin fluctuated between $15,000 and $20,000, roughly 70% below its 2021 all-time high.

Currently, BTC is consolidating in a narrower $65,000 to $70,000 band. K33’s regime model — which integrates derivatives positioning, ETF flows, technical signals and macroeconomic data — indicates the market may once again be approaching a cyclical trough.

Participation fades

A hallmark of late-stage bear markets is declining activity, and recent metrics point in that direction. Spot trading volumes have dropped 59% week-over-week, while perpetual futures open interest has fallen to a four-month low. Funding rates remain negative, suggesting speculative demand has cooled.

Lunde noted that such slowdowns typically follow large liquidation events, as traders absorb losses and reposition.

U.S.-listed spot bitcoin ETFs have recorded a peak-to-trough drawdown of 103,113 BTC in holdings since early October — the largest decline on record. Even after bitcoin retraced nearly 50%, more than 90% of peak ETF exposure in bitcoin terms remains intact.

Sentiment indicators also reflect deep pessimism. The Crypto Fear and Greed Index recently plunged to a record low reading of 5 and has stayed below 10 for much of the past week.

A bottom forming, but consolidation ahead

Taken together, the data suggests bitcoin is “likely near, or at, a global bottom,” Lunde said. However, he expects a prolonged consolidation phase between $60,000 and $75,000, similar to previous late-cycle regimes that delivered subdued short-term returns.

For long-term investors, such periods have historically presented favorable accumulation opportunities — provided they are willing to remain patient.

James Check, an on-chain analyst and co-founder of Checkonchain, echoed that view, noting that bitcoin often trades sideways for extended periods before experiencing sharp repricing bursts. Those explosive rallies are typically concentrated in a limited number of trading days, often early in a bull market and again during its later stages.

He warned that attempting to perfectly time market tops and bottoms frequently results in missing the initial surge.

While prolonged consolidation can test conviction, historical cycles suggest that steady positioning — rather than precise timing — has tended to reward disciplined investors.