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The decline in Bitcoin deepened significantly yesterday evening, reaching as low as $60. With BTC falling to levels not seen since October 2024, this massive drop has sparked talk of a potential bottom in the market.
However, Jefferies analysts said that despite the massive crash, there are no signs of a bottoming out in the market yet.
According to Coindesk, US-based investment bank Jefferies stated that despite the recent sharp decline in the cryptocurrency market, there is still room for further decline and there is no sign yet that the bottom has been reached in the short term.
The bank attributed the decline to global risk aversion trends and liquidity adjustments stemming from capital outflows.
At this point, analysts said that short-term investors continuing to sell Bitcoin and outflows from spot ETFs were continuing to put pressure on the Bitcoin and crypto market.
Jefferies said that the sharp price drops have revived “crypto winter” narratives. However, he argued that the current weakness is more closely linked to a broader risk-aversion trend in global markets and a move away from growth assets, rather than any collapse in the fundamentals of the crypto market.
Finally, Jefferies added that while a bottom hasn’t been reached in the short term, there are long-term catalysts for Bitcoin and the market. The bank listed these as “an improving regulatory environment, maturing infrastructure, and greater involvement from traditional financial institutions.”
*This is not investment advice.