Bitcoin’s continued sell-off has revived fears that the market is slipping back into a familiar four-year cycle pattern, even as brokerage and research firm K33 argues a full repeat of prior bear markets is unlikely.
In a report published late Tuesday, K33 Head of Research Vetle Lunde said bitcoin is down roughly 40% from its October peak, with last week alone delivering an 11% drawdown amid heightened global risk aversion.
Cycle fears return
Lunde, who previously pushed back on rigid cycle narratives, said recent price action is showing “unsettling similarities” to the deep sell-offs seen in 2018 and 2022.
He previously wrote:
“Rhe 4-year cycle is dead, long live the king”
Lunde argued that cycle fears can become self-fulfilling as long-term holders trim exposure to protect gains and new capital hesitates to enter.
Why K33 says this cycle may differ
Despite the similarities in market behavior, Lunde said the backdrop has changed due to growing institutional adoption, regulated product inflows, and an easing rate environment.
He said:
“This time is different”
Lunde added he does not expect a 365-day peak-to-trough drawdown of 80% like prior cycle collapses, citing the absence of forced deleveraging events that amplified losses during the 2022 credit unwind.
Bottom signals, but not definitive
Lunde said several indicators associated with market bottoms have started to flash.
On Feb. 2, bitcoin logged a 90th-percentile spot trading day with more than $8 billion in volume as prices revisited 2025 lows.
Derivatives positioning also turned sharply risk-off, with open interest and funding rates falling into extreme negative territory after roughly $1.8 billion in long liquidations.
Lunde cautioned:
“With BTC nearing a flat return profile over the past two years, we sense no urgency for long-term holders to sell.”
K33 highlighted the $74,000 area as key support, warning a break could open a move toward the November 2021 peak near $69,000 or the 200-week moving average around $58,000.
