Bitcoin at $64,800: When Will the Bottom Arrive?

$64,800. That's where Bitcoin sits today, down 47% from its October 2025 peak of $123,500. Ethereum's pain runs deeper at nearly 60% from its highs. The question burning through every crypto investor's mind: Have we finally hit bottom?

Jefferies delivered a sobering answer this week: "Few signs of an imminent bottom yet." But their analysis cuts deeper than simple bearish sentiment, offering a framework that could reshape how we think about crypto market cycles.

It's Liquidity, Not Fundamentals

The investment bank's diagnosis is precise: This isn't a collapse in blockchain activity but a "liquidity-driven, risk-off correction." The distinction matters more than you might think.

While prices crater, the underlying infrastructure hums along. Network usage remains steady. Select corporations continue accumulating bitcoin. The $2 billion in recent long liquidations amplified volatility, but these are structural market issues, not existential threats to the technology.

"Crypto winter" narratives are resurging, but Jefferies sees something different. Global risk-off sentiment and rotation away from growth assets explain more of the weakness than any fundamental breakdown in blockchain adoption. The selloff mirrors broader market dynamics rather than crypto-specific problems.

This perspective challenges the traditional boom-bust narrative that's dominated crypto for over a decade. Perhaps we're witnessing the sector's integration into mainstream finance—complete with its institutional volatility patterns.

Institutions Drive the Pain

The real pressure comes from large bitcoin holders and persistent spot ETF outflows. Jefferies notes that "institutional portfolio rebalancing is exerting greater pressure on prices than retail behavior."

This marks a fundamental shift. Retail panic used to drive crypto crashes. Now it's institutions methodically adjusting risk exposure that moves markets. The professionalization of crypto has brought institutional-grade volatility.

Yet smaller holders aren't capitulating. Mid-sized investors are holding positions rather than aggressively exiting. Centralized exchange volumes and DeFi lending activity show signs of stabilization after recent spikes.

The data suggests a maturing market where different participant classes behave distinctly. Institutions de-risk systematically while retail shows resilience—a pattern more common in traditional asset classes than crypto's historically uniform crowd behavior.

Selective Recovery Ahead

Jefferies stops short of full bearishness, identifying longer-term catalysts that could reignite interest: regulatory progress, infrastructure maturity, and greater traditional finance participation.

But here's the twist: Don't expect another broad-based rally. The bank anticipates "wider performance divergence rather than a uniform rebound," with gains concentrated in revenue-generating blockchain tokens.

This evolution toward selectivity reflects crypto's maturation. The days of everything pumping together may be ending. Investors will need to distinguish between projects with actual utility and those riding momentum waves.

For institutional allocators, this creates both opportunity and complexity. Portfolio construction becomes more nuanced when crypto assets start behaving like distinct sectors rather than a monolithic risk-on trade.