Jefferies: The crypto market has not bottomed out yet, but high-quality tokens may lead the way higher.

February 6 News, investment bank Jefferies pointed out in its latest research report that although Bitcoin and Ethereum prices have retreated to levels historically attracting “bottom-fishing funds,” there are no clear signs of a bottoming out in this round of cryptocurrency sell-off. The firm believes that the current correction is more like a adjustment triggered by liquidity contraction rather than a decline in the blockchain ecosystem itself.

The report shows that Bitcoin is currently hovering around $64,800, about a 47% retracement from its October 2025 high of $123,500; Ethereum is around $1,900, nearly 60% below its cycle peak. Jefferies noted that the rapid price decline has reignited market concerns about a “crypto winter,” but the main reason remains the global risk-off sentiment and capital rotation out of growth assets.

On-chain data and industry dynamics present a different picture. The bank emphasized that network usage remains stable, and some companies are still selectively accumulating Bitcoin, indicating that the underlying infrastructure has not been damaged. Meanwhile, over $2 billion in long positions have been forcibly liquidated, exacerbating short-term volatility in major crypto assets.

From a capital structure perspective, Jefferies believes that the recent price pressure is mainly due to the reduction of large Bitcoin holders and the continued net outflow from spot ETFs, reflecting that institutional portfolio rebalancing has a greater impact than retail behavior. In contrast, small and medium-sized holders are more inclined to maintain their positions, with no signs of mass withdrawal.

Additionally, trading volume on centralized platforms and decentralized lending activities, which surged earlier, are beginning to stabilize, indicating that the market is undergoing an emotional recovery phase.

Despite a cautious stance, Jefferies does not hold an outright bearish view. The firm pointed out that improvements in the regulatory environment, mature infrastructure, and ongoing participation from traditional finance could rekindle market interest in the medium to long term, driving blockchain projects with real profitability and application scenarios out of a differentiated phase rather than a full rebound.