Bitcoin falling to $67,000 could signal a challenging summer ahead as investor capital continues to flow into artificial intelligence (AI) stocks and away from crypto.
In a Tuesday report, K33 Research head Vetle Lunde said bitcoin’s weakness reflects fading institutional demand, strong ETF outflows and growing vulnerabilities in derivatives markets.
“Much of the market considers the opportunity cost of holding BTC too high while everything AI-related is rising,” Lunde wrote.
The deviation has become increasingly difficult to ignore. Bitcoin has failed to recover its 200-day moving average, while the Nasdaq and S&P 500 continue to set record highs. Investors are also looking forward to potential IPOs from companies like SpaceX and Anthropic, which may draw capital away from crypto, Lunde argued.
This rotation is evident in bitcoin ETF flows. Spot bitcoin exchange-traded products have lost 62,794 BTC over the past three weeks, the second-largest outflow streak on record, the report noted.
K33 said ETF sales accelerated after bitcoin’s failed attempt to break above its 200-day moving average last month.
The $60,000 bottom is questioned
The shift in tone marks a notable change for the K33. The firm previously argued that bitcoin’s plunge to around $60,000 in February probably marked the deepest decline of the cycle. A central part of this thesis was unusually negative funding rates in perpetual futures markets, which reflected persistent bearish positioning and created conditions for severe short squeezes.
This setup helped fuel bitcoin’s rebound toward $83,000. But the rally ultimately stalled at the 200-day moving average, a level that has capped previous bear market rallies.
Today, the derivatives picture looks very different, said Lunde. CME bitcoin futures open interest has fallen to its lowest level since October 2023, a sign that institutional traders are reducing exposure. Meanwhile, funding rates in perpetual futures have risen along with open interest even as bitcoin falls, suggesting leveraged longs are building into a weakening market.
While the firm has not completely abandoned its view that $60,000 marked the cycle low, the tone has become more defensive.
“We read the latent selling pressure in these leveraged longs as a warning of possible deeper lows and advise caution,” the report said.
K33 still sees bitcoin as undervalued relative to stocks in the long term. But with institutional demand slowing, ETF investors heading for exits and capital chasing stronger performing sectors, the firm says the market faces a tougher backdrop than it did just a few weeks ago.
“With outside capital reluctant to come in and incumbents trimming exposure, we could be in for a turbulent summer,” Lunde wrote.
