- Jefferies sees the crypto downturn as a liquidity-driven correction, not a collapse of underlying blockchain fundamentals.
- Large holder selling and persistent spot ETF outflows are identified as key near-term headwinds, outweighing retail selling pressure.
- Despite the slump, long-term catalysts like regulatory progress could lead to a divergence in performance between tokens rather than a uniform market rebound.
Financial analysts at Jefferies stated this week that the current cryptocurrency selloff shows few signs of an imminent bottom, even with Bitcoin and ether hovering near historically attractive levels. The bank described the downturn not as a failure of blockchain activity but as a liquidity-driven correction, according to a recent research note.
Consequently, bitcoin now trades near $64,800, roughly 47% below its October 2025 peak. Meanwhile, ether trades around $1,900, down nearly 60% from its prior cycle highs.
However, Jefferies argued that current weakness is more tied to broader risk-off sentiment than to deteriorating fundamentals. More than $2 billion in recent long liquidations has further amplified day-to-day volatility.
The bank highlighted selling from large bitcoin holders and persistent spot ETF net outflows as key near-term headwinds. This suggests institutional rebalancing is exerting greater pressure on prices than retail behavior.
At the same time, smaller and mid-sized holders appear to be holding existing positions rather than aggressively exiting. Centralized exchange trading volumes and decentralized lending activity have also begun to stabilize.
Despite its cautious tone, the report stops short of a fully bearish outlook. Jefferies said longer-term catalysts like regulatory progress could eventually drive renewed interest in specific tokens.
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