K33 Warns Bitcoin Faces Choppy Summer as Spot Bitcoin ETFs Shed 62,794 BTC

K33 Research said Bitcoin is facing a more challenging environment as it fell toward USD $67,000, with the firm pointing to weakening institutional demand, strong outflows from spot Bitcoin ETFs, and growing appeal of companies tied to artificial intelligence.

“Bitcoin set for 'choppy summer' as capital chases high-flying AI stocks, K33 says The firm still views bitcoin as undervalued relative to equities, but says investors are rotating into AI stocks as the opportunity cost of missing gains by holding BTC is too high”

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In a Tuesday report, K33 head Vetle Lunde argued that “Much of the market views the opportunity cost of holding BTC as too high while anything AI-related soars,” linking the rotation away from crypto to AI stocks and upcoming tech IPOs.

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K33 also said Bitcoin has failed to reclaim its 200-day moving average while the Nasdaq and S&P 500 continue setting record highs, and it cited spot bitcoin exchange-traded products shedding 62,794 BTC over the past three weeks.

The firm said ETF selling accelerated after Bitcoin’s failed attempt to break above its 200-day moving average last month, and it warned that rising leverage and fading institutional demand could lead to deeper losses.

K33 previously called $60,000 the cycle low, but in its latest framing it cautioned that the derivatives picture has changed, with CME bitcoin futures open interest falling to its lowest level since October 2023.

K33 said the derivatives picture now looks “very different,” noting that CME bitcoin futures open interest has fallen to its lowest level since October 2023 as institutional traders reduce exposure.

At the same time, K33 said funding rates in perpetual futures have risen alongside open interest even as Bitcoin falls, suggesting leveraged longs are building into a weakening market.

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In CoinDesk’s account of K33’s warning, the firm said it reads “the latent selling pressure in those leveraged longs as a warning of possible deeper lows and advise caution,” while still not fully abandoning its view that $60,000 marked the cycle low.

CoinDesk also reported that Bitcoin futures funding rates have remained negative for 67 consecutive days, the longest streak in 10 years according to K33 Research, and it described how negative funding can intensify pressure on shorts to cover.

The same CoinDesk piece framed the setup around competing pressures, with negative funding keeping open the possibility of a forced rise in short positions if Bitcoin breaks above $83,200.

K33 said the opportunity cost of holding BTC is too high as capital chases AI-related stocks, and it tied the rotation to ETF flows showing their second-largest three-week outflow streak on record.

“- L’indicateur propriétaire de K33 montre des similitudes avec les creux de septembre et novembre 2022, suggérant une possible fin de bear market mais sans rebond immédiat garanti”

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CoinDesk reported that spot bitcoin exchange-traded products shed 62,794 BTC over the past three weeks, and it said the selling accelerated after Bitcoin failed to break above its 200-day moving average.

In DiarioBitcoin’s description of K33’s analysis, the firm said the weakening demand is paired with “fuertes salidas de capital de los ETF al contado,” and it warned that the support of USD $60,000 “ya no parece tan sólido como antes.”

DiarioBitcoin also said K33 observed a rotation of capital from Bitcoin toward AI-related stocks, and it cited that Bitcoin was trading near USD $67.000 while struggling to recover momentum.

Separately, CoinDesk said K33 still views Bitcoin as undervalued relative to equities over the long run, but with outside capital reluctant to enter and existing holders trimming exposure, it expects a tougher backdrop than “just a few weeks ago.”