Bitcoin’s BTC$89,061.05 recent slide may feel ominous, but K33 Research analyst Vetle Lunde says December could mark a turning point for the cryptocurrency. After its steepest correction since the last bear market, the firm sees more evidence for a rebound than another collapse.

BTC has been weighed down by a wave of selling, much of it structural. Spot bitcoin exchange-traded funds (ETFs), which had been the market’s biggest buyers, turned into net sellers in November. CME futures activity has dropped to a multi-year low, signaling TradFi’s hesitation. Bitcoin’s price, meanwhile, has underperformed equities, reaching its weakest level against the Nasdaq since late 2024.

But K33 sees a market that’s overreacting to distant threats while missing near-term signals of strength. “The case for material upside is far more plausible than an 80% drawdown repeat,” the firm wrote in its December outlook.

They point to several factors. First, bitcoin is trading near strong historical support levels — around $70,000 to $80,000 — while broader positioning in futures remains cautious, not overheated. Perpetual markets show low leverage, and major liquidations haven’t materialized despite price pressure.

Long-term fears, such as quantum computing risks, potential bitcoin sales by Strategy (MSTR) or instability at Tether, may sound dramatic but are unlikely to hit anytime soon. K33 notes each of these threats is years away from posing real risk and shouldn’t be driving today’s price moves.

Instead, the firm argues, the focus should be on what lies ahead in the near term. With supportive policy changes on the horizon, including possible 401(k) access to crypto, and a pro-crypto shift at the Federal Reserve, K33 sees structural upside building. Bitcoin’s current valuation, they say, reflects fear more than fundamentals.

For now, the market remains cautious. But K33’s outlook suggests that December may offer a window for bold positioning.