Prominent market analysts from both independent research and institutional brokerage firms are declaring that Bitcoin (BTC) has weathered the worst of a prolonged sell-off and is now positioned in deeply oversold territory, presenting a favorable risk-reward profile for accumulation.
Lyn Alden, a renowned macro strategist, assessed that the "biggest pain" period has passed. She attributed the four-month decline to weak individual investor demand, with institutional channels like ETFs and corporate treasuries providing the primary buy-side pressure. Alden also noted Bitcoin was unfairly grouped with software (SaaS) companies undergoing AI-related sell-offs. While acknowledging the psychological pressure of the halving cycle, she predicted Bitcoin would not experience an 85-90% drop, citing historically low weekly RSI levels as evidence the asset is oversold. "We're much closer to the bottom than the peak; I think the worst of the selling pressure is behind us," Alden stated, adding she would choose Bitcoin over gold for the next 2-3 years.
K33 Research, in a report by Head of Research Vetle Lunde, provided detailed on-chain and derivatives data supporting the oversold thesis. Bitcoin recently endured six consecutive weekly declines and five straight down months, one of its longest losing streaks. This pushed the weekly Relative Strength Index (RSI) to 26.84, the third-lowest reading on record.
The report highlighted that the sell-off was driven by long-term holders and institutional investors. In Q4 2025, supply aged six months or more declined sharply, ETF investors reduced exposure by nearly 100,000 BTC, and CME futures open interest fell to two-year lows. However, these outflows have recently begun to ease.
Derivatives markets show extreme bearish sentiment. The 30-day average funding rate for Bitcoin perpetual futures turned negative for only the tenth time since 2018, indicating strong demand for short positions. Options traders are also paying a premium for downside protection. Historically, such negative funding regimes have been followed by strong returns, with average gains of 62% over 90 days and 101% over 180 days.
Despite this defensive positioning, Bitcoin showed resilience during recent Middle East geopolitical tensions, posting modest gains while oil spiked and equities declined. Lunde attributed this to the significant de-risking already completed, noting institutional CME exposure fell ~35% and ETF holdings dropped ~90,000 BTC over five months. Bitcoin is now consolidating near its 200-week moving average, a level historically associated with market bottoms.
"The worst is behind us; now we wait," Lunde concluded, adding, "We see no compelling reason to sell BTC at current levels." Bitcoin was trading just below $71,000 at the time of the report, up 4.7% over 24 hours.
