Analysis: Bitcoin Unlikely to Repeat the Extreme Bear Markets of 2018 or 2022

According to Odaily, K33 Head of Research Vetle Lunde stated that bitcoin has dropped about 40% from its October high, with an 11% decline last week alone, clearly impacted by a global decrease in risk appetite. Although the recent price movement shows "disturbing similarities" to the deep sell-offs in 2018 and 2022, Lunde emphasized that "this time is different," and does not expect an 80% peak-to-trough retracement as seen in the previous two cycles.

Lunde pointed out that the current market environment differs from previous cycles due to increased institutional adoption, capital inflows into regulated products, and a looser interest rate environment. Meanwhile, several indicators commonly used to identify market bottoms have started to flash signals:

1. On February 2, bitcoin saw a high trading volume day at the 90th percentile, with single-day turnover exceeding $8 billion, and the price retesting the 2025 low.

2. In the derivatives market, both open interest and funding rates fell into extremely negative territory, accompanied by about $1.8 billion in long liquidations—a situation that has historically often coincided with rebounds.

Vetle Lunde emphasized that while bottom signals have appeared, they are not yet conclusive, as similar extreme volume and derivatives indicators have occurred during false rebounds or mid-cycle corrections. In the short term, the key support level is around $74,000; a break below could accelerate the decline, with targets at the November 2021 high near $69,000 or the 200-week moving average around $58,000. Overall, Vetle Lunde believes that long-term holders currently face no urgent selling pressure, and the current price presents an attractive entry opportunity for long-term investors, not signaling a repeat of the extreme bear markets of 2018 or 2022. (The Block)