Bitcoin traders are showing “aggressive caution” heading into the Easter period, according to research firm K33, as weak price performance, Iran-led geopolitical uncertainty, and fresh quantum computing warnings weigh on sentiment.
Head of Research Vetle Lunde flagged the buildup in defensive positioning in a new report, noting that leveraged short bitcoin exchange-traded funds now hold 9,012 BTC in exposure — the second-highest level ever — following 22% growth in short exposure over just a few days.
Lunde wrote:
“Such jumps in short exposure typically reflect concentrated bearish positioning, and point toward aggressive caution from traders.”
Funding rates signal a potential bottom
Despite the bearish tilt, Lunde pointed out that the current environment mirrors typical bottoming conditions, where bearish positions become overcrowded.
He noted:
“Annualized 30-day average funding rates have now stayed negative for 32 consecutive days, and are two weeks away from surpassing the duration of the negative funding rate regime from November to December 2022.”
Negative funding rates remaining sticky at this duration is historically associated with market lows rather than continued downside, according to K33’s analysis.
Easter volume and volatility trends
A flurry of public holidays across many parts of the world typically drives a drop in trading volume and bitcoin volatility around Easter, particularly on the Thursday before Good Friday and the days immediately after.
While crypto markets trade 24/7, they are not immune to reduced liquidity — especially during European hours.
Lunde found that bitcoin has seen lower trading activity during Easter than the yearly average in every year since 2019.
A similar pattern holds for volatility, with lower seven-day measures recorded every Easter compared to the yearly average, reinforcing the case for a quieter market in the days ahead.
