Bitcoin Traders Go Heavy Short as K33 Flags Bearish Bets Ahead of Easter

K33 Research says Bitcoin (BTC) traders are leaning aggressively bearish ahead of Easter and amid heightened Middle East geopolitical risk. In recent sessions, leveraged short exposure via major Bitcoin ETFs rose about 20% in days, reaching the second-highest level on record. K33’s Vetle Lunde notes this defensive positioning historically often appears near trend changes. Derivatives signals add to the caution: perpetual futures funding rates have stayed negative for over a month, the longest streak since the 2022 bear market. Negative funding suggests shorts are paying longs to keep positions open, raising the risk of a short squeeze if BTC rebounds and shorts rush to cover. K33 also points to seasonality. Bitcoin has followed a relatively predictable pattern around Easter for six years, when European banks and trading desks typically reduce activity, lowering volume and compressing volatility. This year could be different because conflict-linked concerns around oil facilities may keep investors more risk-aware. Two post-holiday scenarios are highlighted for Bitcoin: (1) with many traders already positioned for downside, bad news during low liquidity could trigger a sharper drop; (2) extreme bearishness can signal seller exhaustion, paving the way for a rebound once normal trading resumes. Overall, the setup suggests elevated volatility risk for BTC traders near the holiday window.