Don't cut your losses before dawn! K33 Report: Bitcoin has fallen into "extremely oversold territory," and selling now makes no sense.

After months of volatility and selling pressure in the cryptocurrency market, K33 Research released a new report stating that Bitcoin has entered a historically rare "extremely oversold" zone. The report emphasizes that despite widespread pessimism in the market, multiple technical indicators and historical data show that the current risk-reward ratio is extremely attractive, making selling Bitcoin at current prices a unwise move.

Technical Analysis: Weekly RSI falls to historical low

According to Vetle Lunde, head of research at K33, Bitcoin recently experienced one of its longest losing streaks in history: six consecutive weeks of declines and five consecutive months of losses. This caused Bitcoin's weekly Relative Strength Index (RSI) to fall below 27 at one point, the third lowest level ever recorded for the asset.

In technical analysis, an RSI below 30 is generally considered a severe oversold signal, suggesting that selling momentum has been exhausted. Lunde points out:

"If you want to make a mistake, follow the crowd."

Sentiment: The derivatives market shows "extreme bearishness".

The report further analyzed data from the contract market and found that the funding rate for Bitcoin perpetual futures had turned negative for the first time. This indicates strong selling pressure, with traders even willing to pay fees to maintain their short positions.

Furthermore, traders in the options market are paying high premiums to buy put options to hedge against downside risk. K33 believes that this extreme defensive positioning is often a precursor to a market reversal. Historical data shows that when funding rates enter similar negative ranges, Bitcoin's average gains over the following 90 to 180 days are as high as 62% and 101% respectively, a success rate of nearly 80%.

Fundamentals: Resilience under geopolitical pressure

Despite recent geopolitical tensions in the Middle East that have triggered soaring oil prices and stock market volatility, Bitcoin has demonstrated unexpected stability. Lunde believes this is because the market has undergone sufficient "risk-free" cleansing.

Data shows that institutional investors' exposure to the CME (Chicago Mercantile Exchange) has decreased by 35%, and ETF investors have also significantly reduced their holdings. With selling pressure from long-term holders easing, Bitcoin is consolidating near the 200-week moving average (a key indicator of a long-term bottom), demonstrating strong support and resilience.

The worst may be over.

K33 Research concludes that Bitcoin is currently in a bottoming-out phase. While a bottom will take time to form, "the worst is over." At the current level of approximately $71,000, the market has already absorbed most of the negative news. K33 Research believes that for rational investors, the current environment is more suitable for accumulating positions than for panic selling.