bitcoin Falling to $67,000 may signal a challenging summer ahead as investor capital continues to flow into artificial intelligence (AI) stocks and away from cryptocurrencies.
In a report on Tuesday, K33 Research director Vetle Lunde said bitcoin’s weakness reflects fading institutional demand, strong ETF outflows and growing vulnerabilities in derivatives markets.
“Much of the market sees the opportunity cost of holding BTC as too high while everything AI-related skyrockets,” Lunde wrote.
The divergence has become increasingly difficult to ignore. Bitcoin has failed to regain its 200-day moving average while the Nasdaq and S&P 500 continue to mark all-time highs. Investors are also awaiting potential IPOs from companies like SpaceX and Anthropic, which may be diverting capital from cryptocurrencies, Lunde argued.
That rotation is evident in bitcoin ETF flows. Spot bitcoin exchange-traded products lost 62,794 BTC in the past three weeks, the second-largest streak of outflows on record, according to the report.
K33 said ETF selling accelerated after bitcoin’s failed attempt to break above its 200-day moving average last month.
The $60,000 fund is questioned
The change in tone marks a notable change for K33. The firm previously argued that bitcoin’s drop to around $60,000 in February likely marked the deepest decline of the cycle. A key part of that thesis was the unusually negative funding rates in the perpetual futures markets, which reflected persistent bearish positioning and created conditions for strong short squeezes.
That setup helped fuel bitcoin’s rebound toward $83,000. But the rally eventually stalled at the 200-day moving average, a level that has capped previous bear market rallies.
Today, the derivatives landscape looks very different, Lunde said. 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 on perpetual futures have risen along with open interest even as bitcoin falls, suggesting that leveraged long positions are driving a weakening market.
While the company 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 those leveraged long positions as a warning of possible deeper lows and advise caution,” the report said.
K33 still considers Bitcoin to be undervalued relative to stocks in the long term. But with institutional demand flagging, ETF investors heading for the exits and capital chasing better-performing sectors, the firm says the market faces a tougher backdrop than just a few weeks ago.
“With outside capital reluctant to come in and existing holders cutting their exposure, we may be in for a choppy summer,” Lunde wrote.
