Bitcoin (CRYPTO: BTC) is down 6% since revisiting its 200-day moving average near $82,000 earlier this month, but K33 Research argues February’s $60,000 bottom still marks this cycle’s maximum drawdown.

Current Pattern Looks Different From 2014, 2018, 2022

K33 Head of Research Vetle Lunde pointed out that Bitcoin spent 189 days between the November 200-day MA breakdown and May retest—far longer than the 96, 132, and 85 days seen in prior cycles. 

Bitcoin also remains more than 20% down during that period compared to positive returns in 2014 and 2022 and a shallower 8% drawdown in 2018.

The 200-day moving average trended higher in prior years but lower in 2026, creating a fundamentally different setup.

Past rallies recovered quickly, rebuilding risk appetite and leverage and setting up the unwind that fueled the next leg lower.

“The current slow grind has not,” Lunde stated. K33 highlighted derivatives data pointing to “uniquely pessimistic sentiment,” with the firm’s framework tracking closer similarities to strong periods like March and April 2025 than to past bear market rallies.

The less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026, with K33 maintaining that $60,000 in February marked this cycle’s maximum drawdown.

Institutions Cut Exposure By 26,733 BTC In Q1

Following the latest 13F disclosures, institutional participants reduced BTC exposure by 26,733 BTC while retail participants increased it by 19,395 BTC in Q1.

Delta-neutral firms like Millennium and Jane Street accounted for most of the reduced institutional exposure, likely caused by compressing crypto yields and opportunities in alternative commodity markets following Iran escalations.

Meanwhile, Bitcoin ETFs recorded their 9th largest 5-day outflow since U.S. spot ETF launch—representing the bottom 1.5% of flow days as Bitcoin’s price approached the average BTC ETF cost basis.

Heavy Outflows Common When Bitcoin Trades Near Cost Basis

K33 found that the likelihood of a bottom 5% flow day climbs to 10.2% in weeks where Bitcoin crosses the cost basis.

The likelihood of a bottom 10% flow day climbs to 16.1% in weeks where Bitcoin trades within 5% of its cost basis.

However, in periods where Bitcoin trades more than 15% above the cost basis, the likelihood of a bottom 5% flow day sits at just 3%. Heavy outflow days are far more common when Bitcoin trades close to its cost basis.

Lunde explained that market participants seek to avoid losses or limit losses after a deep drawdown.

The current market lacks the leverage build-up typically seen during prior bear market rallies, reinforcing K33’s view that February’s low holds as the cycle bottom.

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