K33 Research believes the worst of bitcoin's decline is likely behind us. The price has fallen over 50 percent from its peak, more than half of all bitcoin sits at a loss, and the price is below its four-year average, the firm's new report shows.
Vetle Andreas Lunde (pictured) is Head of Research at K33.
Analytics firm K33 Research has summarized bitcoin's first half of 2026, and the report paints a two-sided picture: On one hand, giants like Morgan Stanley, Bank of America and Charles Schwab have opened their doors to crypto over the past year. On the other, the bitcoin price has slumped and performed far worse than both the stock market and several other cryptocurrencies. K33 describes the situation as bitcoin having "completely decoupled from its fundamentals."
While Nasdaq futures have risen 25.6 percent over the past year, bitcoin has fallen 40.6 percent in the same period, K33's figures show. The decline has coincided with a string of institutional milestones: Morgan Stanley opened crypto investing to all its wealth-management clients, Bank of America gave its advisers the green light to recommend a 1–4 percent weighting in bitcoin ETFs, and Charles Schwab rolled out bitcoin and ether trading to US users. In addition, mortgage giant Fannie Mae has moved into crypto-related mortgages, and the US Department of Labor has put forward a proposal that could open the door to bitcoin exposure in the US retirement system.
The broader crypto market was also marked by red numbers in the first half. Among the largest currencies, ether fell 44 percent, solana nearly 45 percent and XRP 41 percent, while bitcoin escaped with a drop of around 29 percent. The exceptions were Hyperliquid's HYPE token, which jumped 144.6 percent, and the tron network's TRX, which rose 16.4 percent.
K33 points out that the forces behind the price decline have shifted from 2025 to 2026. Last year, it was long-term holders selling off in large volumes. That selling dampened what could otherwise have been a stronger rally in 2024 and 2025.
This year, the picture has flipped. Long-term investors are now largely sitting still, and this year's selling pressure instead comes from investors who bought recently and are now selling at a loss.
For a period earlier this year, it was also highly leveraged speculators driving the selling. The share of trading days with a positive funding rate for bitcoin derivatives fell to 57 percent in 2026, against a historical average of 84 percent since 2018. At the same time, the average annualized yield dropped to a modest 1.1 percent, against a historical average of 9.4 percent. According to K33, this unusually negative sentiment among speculators helped pave the way for the sharp price reversal in April.
Then a new group of sellers emerged: the bitcoin ETFs themselves. After reaching a peak of around 1.56 million bitcoin in holdings earlier this year, global ETFs fell to 1.47 million bitcoin by the end of June — a drop of more than 96,000 bitcoin. The rolling five-week net outflow hit minus 94,635 bitcoin. According to K33, this is the most powerful sustained sell-off the firm has ever observed in this category.
K33 notes that ETF capital flows have historically tracked bitcoin's 30-day return closely. Large sellers therefore gain disproportionate power in a market where trading activity has generally declined in recent years. Both bitcoin's rolling spot volume and CME futures volume have fallen from earlier peaks, which the report says makes the market especially sensitive to new buyers and sellers.
K33 highlights several historical indicators suggesting the decline may be leveling off. At the start of June, more than 50 percent of the circulating bitcoin supply sat at an unrealized loss. Historically, this has occurred just before the market bottomed, as in 2011, 2014, 2018 and 2022. In those four instances, it took between 13 and 101 days from reaching that level to hitting bottom, with the remaining decline ranging between 15 and 46 percent.
Bitcoin has also traded unusually close to its 200-week moving average, sitting just 4.3 percent below that level as of June 5. Historically, such proximity has coincided with market bottoms, as in August 2015, December 2018 and March 2020 — although in November 2022 the price stayed below the average for over a year before turning.
K33 believes the causes behind the weak price have changed character: in 2025 it was old holders selling, while 2026 is more about weak demand. Investors have simply found more attractive opportunities in other risk assets, while ETF selling has set new records. With little fresh capital and periods of intense selling pressure, it's natural for the trend to point downward, the analytics firm writes.
Although the typical four-year cycle suggests the price could fall further, K33 expects this year's maximum decline to be significantly milder than before. The reason is that the preceding rally was relatively moderate compared with previous bull markets.
So far, this year's downturn has lasted 261 days and shaved 51.7 percent off the peak. By comparison, bitcoin plunged between 76 and 85 percent in the three preceding cycles, over periods lasting between 364 and 401 days.
Sources: K33 Research
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