Jefferies Sees No Clear Bottom as Crypto Weakness Persists

Jefferies analysts say recent price stabilization in crypto should not be mistaken for a confirmed market bottom, even as Bitcoin and Ethereum trade near levels that have historically attracted dip-buying.

In their view, the current drawdown reflects broad institutional de-risking and global risk aversion rather than any breakdown in blockchain fundamentals.

The bank frames the move as liquidity-driven, with macro pressure overwhelming short-term valuation signals across digital assets.

Why the Market Still Lacks a Floor

According to Jefferies, several forces continue to prevent a durable base from forming. Institutional activity remains the dominant driver, with net outflows from spot ETFs and continued selling by large Bitcoin holders exerting more influence on prices than retail flows.

That pressure has been amplified by liquidation dynamics. Jefferies pointed to more than $2 billion in recent long liquidations, which intensified daily volatility and reinforced what many participants describe as a “capitulation mode” environment rather than a controlled correction.

Price Levels Are Near Historical Buy Zones But Context Matters

From a pure price perspective, Bitcoin is trading near $65,000, roughly 47% below its October 2025. Jefferies acknowledged that similar drawdowns in past cycles have often marked attractive long-term entry points.

However, the bank cautioned that historical analogies lose reliability when liquidity conditions and institutional positioning remain unresolved. Without a slowdown in forced selling or ETF outflows, proximity to prior dip-buying zones alone is not sufficient to signal a bottom.

Where Jefferies Still Sees Long-Term Opportunity

Despite its near-term caution, Jefferies does not view the current phase as a full-scale bear market. Instead, analysts expect a divergence in performance rather than a uniform rebound across the sector.

The bank is most constructive on tokens linked to blockchains that generate measurable revenue and maintain what it describes as “intact fundamentals.” Assets with clear economic throughput are viewed as better positioned to recover once liquidity conditions improve.

Institutional Use Cases Matter More Than Narrative

Jefferies highlighted the growing integration between crypto networks and traditional finance as a longer-term tailwind. Increased participation from established institutions and more mature market infrastructure are expected to benefit revenue-linked assets over time, even if speculative segments remain under pressure.

Notably, analysts observed early signs of stabilization in decentralized lending activity and exchange volumes. While prices continue to struggle, underlying network usage appears more resilient than sentiment suggests.

Correction, Not Collapse

The bank characterized the current downturn as a liquidity-driven correction rather than a systemic failure of the crypto ecosystem. Blockchain fundamentals, in Jefferies’ view, remain largely intact, even as valuations adjust to tighter financial conditions and reduced risk appetite.

That distinction underpins the expectation of a selective recovery, led by tokens with clearer regulatory footing and demonstrable institutional utility.

Portfolio Framing Remains Conservative

Jefferies strategist Mohit Kumar reiterated that crypto should remain only a very small allocation within diversified portfolios. The recommendation reflects crypto’s continued high correlation with the struggling software and technology sector, which remains sensitive to macroeconomic headwinds.

Until liquidity conditions improve and institutional selling pressure eases, Jefferies’ message is clear: proximity to past buying levels does not equal confirmation, and selectivity matters more than timing.

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