Jefferies: Signs of a Bottom in the Crypto Market are Weak

Jefferies' Crypto Market Analysis

Jefferies states that the recent crypto sell-offs provide little evidence for an upcoming bottom. While Bitcoin and Ethereum are trading near levels that previously attracted dip buyers, the situation remains highly uncertain. The bank emphasizes that this decline is a liquidity-driven, risk-off correction and notes that there has been no collapse in the fundamental characteristics of the blockchain. Jefferies sees stable network usage and selective institutional Bitcoin accumulation as supporting factors in this scenario.

However, it points out that large holders' sales and outflows from spot Exchange-Traded Funds (ETFs) represent ongoing challenges in the near term. In the long run, it is anticipated that regulatory developments and traditional finance participation may selectively boost gains in revenue-linked tokens. This situation could lead to increases in specific assets rather than a broad market recovery.