Bitcoin’s 36% decline from its all-time high has pushed the market into what K33 Research describes as a sentiment-driven overshoot, creating what the firm sees as a compelling long-term entry point for investors.
Relative underperformance to equities
Vetle Lunde, K33’s Head of Research, highlighted that bitcoin has underperformed the Nasdaq in 70% of sessions over the past month, a phenomenon observed only a few times since 2020.
Bitcoin now sits 30% weaker relative to the index compared to early October.
Previous episodes of such underperformance were tied to major bitcoin-specific shocks, including the Mt. Gox and German government sales in July 2024, heavy Grayscale outflows in January 2024, and market contagion in June 2022.
Correlations and market structure
Unlike past cycles, this period sees bitcoin closely tracking equities, but with more pronounced losses on down days and muted rebounds.
Lunde noted that, despite this, the market structure is evolving, with new initiatives from major banks and the Clarity Act opening access. He stated:
“We view the current relative pricing of BTC to other risk assets as a significant disconnect from the underlying fundamentals, and consider BTC a strong relative buy at current rates for any long-term focused investor.”
Panic signals and saturation
Lunde pointed to panic-driven capitulation signals as evidence that the sell-off is near exhaustion.
On November 21, spot volumes reached $14.3 billion, with 169,523 BTC traded—the sixth highest of 2025.
Meanwhile, daily spot volumes above $10 billion, which typically mark local highs or lows, have reappeared four times recently. On the CME, open interest dropped to seven-month lows, indicating low risk appetite.
Derivatives and ETP flows
Open interest in perpetual futures had surged before declining as funding rates turned negative, signaling aggressive long unwinding.
ETPs have also shown stress, with two daily outflows exceeding 10,000 BTC this month alone, and net outflows over the past 30 days surpassing 62,000 BTC—a level not seen since March.
Lunde described these redemptions as signs of “elevated panic” typical of environments where sentiment overshoots fundamentals.
