Jefferies has warned that recent technical signals in Bitcoin warrant caution, trimming its exposure to the cryptocurrency in favour of gold equities as momentum indicators turn negative.
The broker, in the latest update from its 'GREED & fear', said it remained a long-term believer in Bitcoin as a store of value, but asserted that the digital asset may already have peaked (in its current 'post-halving' cycle), having reached around US$126,000 in early October.
Analysts at Jeffs have, as such, cut their weighting by one percentage point, citing Bitcoin’s breakdown against "the True Strength Index", described as a long-term momentum gauge that has only flashed similar warnings twice since 2015.
Jefferies noted that both previous breakdowns (in early 2018 and late 2021, respectively) were followed by price declines of roughly 70% over the subsequent year.
The latest reversal, therefore, “has not been encouraging,” Jefferies analysts said in a note, prompting a tactical pivot into gold miners.
If their assessment proves correct, the much-anticipated “alt season” may not materialise at all in this cycle, Jefferies added.
And, if that's the case, there will be a number of disappointed crypto traders who may be made to wait longer for the next broad-based crypto rally, potentially until after the next 'halving' event in 2028.
Moreover, analysts cautioned that Bitcoin’s failure to set new highs could be an early warning sign of tightening liquidity conditions, which piles on negative implications for riskier assets (like digital currencies).