Bitcoin (BTC) has remained trapped between $60,000 and $80,000 for six consecutive months, reflecting a market increasingly defined by apathy and weak trading activity. However, such thin volumes combined with elevated open interest leave room for sudden spikes in liquidation, according to a Tuesday report by K33.
Bitcoin trades near 50% drawdown, fails to establish new lows
The report states that Bitcoin continues to trade near a 50% drawdown from its all-time high, a pattern that differs from previous major bear markets in 2014, 2018 and 2022.
Bitcoin first reached the 50% drawdown level on February 5 and remained around that level as of August 11. Unlike previous downturns, however, the top crypto has not continued establishing progressively lower lows.
Instead, K33 notes that the prolonged consolidation has coincided with declining market activity, as seasonal summer weakness has added to the lack of momentum.
Onchain data also shows that BTC moved from long-term holders to short-term holders and subsequently back to new long-term holders. The firm noted that this pattern, combined with months of weak price action and opportunities for investors to exit, suggests that sell-side saturation may be developing.
K33 describes the current environment as one in which sellers have had considerable time to reduce their exposure, while buyers remain reluctant to enter aggressively because of Bitcoin’s relative weakness.
“Buyers remain hesitant given relative weakness and no clear signs of a regime change, leaving BTC stuck chopping near a 50% draw,” K33 wrote.
Despite the subdued activity, the firm reiterated that it views the current area as an attractive point for allocating to Bitcoin.
Perpetual futures activity hits three-year low
K33 also focused on Bitcoin perpetual futures, where trading activity has fallen to levels not seen since 2023. The 30-day average combined trading volume for BTCUSDT perpetual contracts on Binance and Bybit dropped to $10.8 billion as of Monday.
This was the lowest level since 2023, with only 5% of trading days since January 2021 recording lower average volumes. The periods with weaker activity were concentrated between December 2022 and January 2023, and again between August and October 2023.
Despite the decline in trading activity, open interest has remained relatively high. Bitcoin perpetual open interest averaged 300,080 BTC between June 1 and August 11, compared with an average of 288,000 BTC for 2026 and 282,000 BTC across 2025 and 2026.
K33 noted that the combination points to elevated relative leverage in the market. This could increase the potential for sharp moves if liquidations begin to force traders out of their positions.
The firm also says that funding rates have remained volatile but relatively moderate. With trading activity so subdued, even modest changes in positioning can produce noticeable shifts in annualized funding rates.
K33 warned that the market’s current passivity does not necessarily mean the risk of volatility has disappeared. Instead, elevated open interest alongside thin trading volumes could leave Bitcoin vulnerable to liquidation-driven moves in either direction.
“The prolonged combination of elevated open interest and volatile, yet relatively moderate, funding rates leaves the market exposed to liquidation-driven moves in either direction,” the report stated.
Bitcoin is trading at $63,200, down 0.9% in the past 24 hours at the time of writing.