Jefferies said the latest cryptocurrency sell-off shows few signs of an imminent bottom, even as Bitcoin and Ethereum hover near levels that have historically attracted bargain hunters.
In a research note this week, the bank characterized the downturn as a liquidity-driven correction rather than a collapse in blockchain activity, pointing instead to continued network usage and selective corporate Bitcoin accumulation as evidence that the industry’s infrastructure remains intact.
Meanwhile, Bitcoin is trading near $64,800, about 47% below its October 2025 peak of about $123,500, while Ethereum is trading at about $1,900, down nearly 60% from its previous cycle high.
Jefferies wrote that the sharp drop in prices has reignited the familiar “crypto winter” narrative, but he believes the current weakness has more to do with broader risk aversion in global markets and a rotation into growth assets than a deterioration in blockchain fundamentals. The recent long-term liquidation of over $2 billion has further amplified the daily volatility of major coins.
The bank highlighted selling by large Bitcoin holders and continued net outflows from spot ETFs as key near-term headwinds, suggesting institutional portfolio rebalancing is putting more pressure on prices than retail investor behavior.
At the same time, Jefferies noted that small and medium-sized holders appear to be holding on to existing positions rather than actively exiting, while centralized exchange trading volumes and decentralized lending activity have begun to stabilize after recent spikes.
Despite the cautious tone of the report, the outlook is not entirely pessimistic. Jefferies said longer-term catalysts such as regulatory progress, infrastructure maturity and greater participation in traditional finance may ultimately reignite interest in tokens related to revenue-generating blockchains, leading to broader performance differences rather than a uniform rebound.
