The Bitcoin market is emerging from one of the most extensive liquidation waves in recent years, according to the analytics firm K33 Research. After a sharp reduction in open interest across perpetual futures, traders appear to be moving into a recovery phase.
Vetle Lunde, Head of Research at K33, noted that such periods have often coincided with the formation of local market bottoms. He said that the market structure has become healthier and that overall leverage has dropped significantly.
“After a substantial reduction in leverage, we view the current levels as attractive for gradually building spot exposure to Bitcoin,” he said.
The sharp sell-off wiped out a significant share of leveraged futures positions and created a wide gap between spot and derivatives markets. The BTC/USDT pair on Binance traded at a 5.1% discount to the spot price – the widest spread since March 13, 2020. K33 analysts emphasized that historically, such dislocations have often marked market bottoms.
Liquidity Remains Thin, but Conditions Are Improving
According to K33 Research, market liquidity is likely to remain low in the coming weeks. Participants are still recovering from forced liquidations, and trading activity is expected to return gradually. Despite this, the firm remains optimistic.
“The reduction in leverage has lowered systemic risks, and overall sentiment is turning constructive,” the report said.
Lunde added that the recovery could be supported by favorable macroeconomic factors, including expectations of monetary easing, growing institutional interest, and potential catalysts linked to the approval of a Bitcoin ETF.
K33 analysts concluded that current market conditions provide a solid foundation for gradual Bitcoin accumulation and a strengthening of the upward trend as the market stabilizes.
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