Bitcoin set for Easter holiday lull amid rising bearish positioning

• Bitcoin trading activity is expected to decline during Easter week as global holidays reduce participation, historically leading to lower volatility.
• Historical data since 2019 shows that Bitcoin’s 7-day trading volume drops below its yearly average during Easter holidays.
• Leveraged short Bitcoin ETFs increased exposure by 22% to 9,012 BTC, signaling rising bearish positioning among traders.

Bitcoin traders may experience subdued market activity as the Easter holiday compresses liquidity across global financial markets, K33 Head of Research Vetle Lunde stated in a Tuesday report.

Lunde wrote that Easter has historically been associated with reduced trading volumes and lower volatility in crypto, highlighting similar seasonal slowdowns observed in equities and other financial markets. 

“This compressed trading week leads to thinner liquidity across equity, bond, and

derivatives markets [...] we also find considerable evidence of slowing activity during Easter in BTC,” the report noted.

Since 2019, Bitcoin’s 7-day trading volume has consistently fallen below its yearly average during the holiday week, with declines ranging from 8% to nearly 58%. Volatility has mirrored this trend, compressing by as much as 60% in previous years.

K33 analysts highlighted that the slowdown is largely driven by a concentration of global banking holidays, which reduce institutional participation and overall market activity.

Bitcoin faces pressure after two weeks of losses

The anticipated slowdown comes amid increased caution among traders. Bitcoin recorded a second consecutive week of losses, declining 6% as bearish sentiment continues to build across the crypto market.

Leveraged short Bitcoin ETFs have expanded their exposure by 22% to 9,012 BTC, marking the second-highest level on record and signaling a notable rise in downside positioning. 

“Such jumps in short exposure typically reflect concentrated bearish positioning, and point toward aggressive caution from traders,” K33 wrote.

At the same time, perpetual funding rates have remained negative for 32 consecutive days, reflecting persistent selling pressure and a crowded bearish trade.

K33 notes that such conditions often indicate heightened defensive positioning among market participants and hints at a market bottom if sentiment becomes one-sided.

Spot trading volumes have fallen to an average of $2.7 billion per day, the lowest level since mid-February, while short-term volatility remains relatively elevated.

The report added that Bitcoin has remained up by 1.4% since late February, outperforming major indices amid the Middle East war. The Nasdaq and S&P futures declined more than 6%, while gold has dropped 14% over the same period.