Jefferies: No Bitcoin Bottom Yet Despite Network Resilience

A new report from Jefferies suggests that while Bitcoin (BTC) and Ether (ETH) face significant near-term headwinds, the underlying blockchain infrastructure remains robust. Analysts point to institutional "de-risking" as the primary driver of recent volatility, rather than a fundamental collapse of the ecosystem.

Market Analysis: Liquidity-Driven Correction vs. Fundamental Health

As of early February 2026, Bitcoin is trading near $64,800, representing a 47% decline from its October 2025 peak of $123,500. Ether has seen a steeper drop, falling nearly 60% from previous cycle highs to hover around $1,900.

Jefferies characterizes this downturn as a liquidity-driven, risk-off correction. The bank notes that over $2 billion in long liquidations recently spiked volatility, reflecting a broader market rotation away from growth assets rather than issues specific to Bitcoin.

Major Cryptocurrency Price Performance (Feb 6, 2026)

Token	Current Price (USD)	% From Cycle High
BTC	$64,856	-47%
ETH	$1,874	-60%
BNB	$619	Not Specified
XRP	$1.305	Not Specified

Institutional De-risking and ETF Trends

The report identifies a divergence between different classes of holders. While spot Bitcoin ETFs face persistent net outflows and large institutional holders are actively rebalancing their portfolios, smaller and mid-sized holders appear to be holding their positions.

"The selling pressure we are witnessing stems more from institutional reallocation than retail panic," says Sam Reynolds, crypto analyst at Jefferies. "Despite this, network usage remains resilient, indicating that the fundamental blockchain infrastructure is intact."

Steady Fundamentals Amid Price Volatility

Despite the bearish price action, Jefferies highlights several stabilizing factors:

• Stable Network Activity: Transaction counts and active addresses remain steady.
• Trading & Lending: Exchange volumes and DeFi lending activity are beginning to stabilize after recent spikes.
• Corporate Accumulation: Selective buying by corporations signals continued long-term confidence.

The bank rejects the "crypto winter" narrative, framing current weakness as a temporary, market-wide trend affecting all growth-related assets.

Long-Term Catalysts and Token Divergence

Jefferies anticipates a shift in market dynamics where fundamental analysis becomes the primary driver of value. The bank identifies three key pillars for future growth:

1. Regulatory Progress: Increased clarity in global markets.
2. TradFi Adoption: Expanded engagement from traditional financial institutions.
3. Infrastructure Maturation: Improvements in the underlying tech stack.

These factors are expected to drive "selective gains," particularly for revenue-linked tokens associated with specific blockchains.

Summary

Jefferies’ February 2026 outlook portrays a market in flux. While institutional selling and liquidity issues mean a definitive bottom hasn't been established, the resilience of blockchain fundamentals suggests a path to long-term recovery. Investors should watch for market divergence, as assets with strong revenue links and regulatory support may outperform.

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