Investment bank Stifel has warned that Bitcoin could slide as low as $38,000 if historical cycles repeat, pointing to tightening liquidity, restrictive monetary policy, and fading institutional demand.

The warning comes as Bitcoin trades just above the $72,000 level, its lowest price since 2024. Bears appear to have taken control of market structure, with rebounds fading quickly and sellers defending key resistance zones.

Macro And Liquidity Pressures Build

Stifel’s outlook centers on a macro backdrop that remains hostile to risk assets. The Federal Reserve’s tighter stance has continued to drain liquidity from global markets, while progress on U.S. crypto regulation has slowed rather than accelerated. In parallel, persistent outflows from spot Bitcoin ETFs suggest institutions are reducing exposure instead of stepping in as buyers of last resort.

As liquidity tightens, Bitcoin’s sensitivity to broader financial conditions becomes more visible. With fewer marginal buyers and reduced risk appetite, price declines tend to accelerate, especially during periods of elevated uncertainty.

Price Action Signals Bearish Control

Bitcoin’s drop to the low-$72,000 area marks a decisive break from the ranges that supported prices through much of 2024 and 2025. Market participation has thinned, rallies have lacked follow-through, and selling pressure has dominated intraday moves. From a sentiment perspective, confidence remains fragile, with traders favoring defensive positioning over accumulation.

Market mood has slipped into extreme fear territory, a level historically associated with stress-driven selling and capital preservation. While such conditions have sometimes preceded longer-term recoveries, they often come with heightened volatility in the near term, particularly when liquidity conditions remain constrained.

Burry Questions Bitcoin’s Hedge Narrative

Adding to the bearish narrative, Michael Burry delivered a sharp critique of Bitcoin in a Substack post published Monday. Burry argued that Bitcoin’s recent performance has exposed it as a primarily speculative asset, rather than a reliable hedge against currency debasement comparable to precious metals.

He noted that Bitcoin has fallen roughly 40% since peaking in October, a move that challenges the idea that it consistently protects purchasing power during periods of macro stress. According to Burry, further losses could quickly strain the balance sheets of major holders, forcing selling across the crypto ecosystem.

Risk Of Cascading Sell-Offs

Burry warned that if forced liquidations begin, selling pressure could spread well beyond Bitcoin itself. In such a scenario, leverage unwinds and balance sheet stress could trigger broader value destruction across the crypto market, amplifying volatility at a time when liquidity is already scarce.

For now, the balance of risks remains skewed to the downside. With macro uncertainty unresolved, institutional flows weakening, and sentiment deeply negative, Bitcoin’s near-term direction appears closely tied to whether global liquidity conditions stabilize or continue to tighten.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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Filed under: Bitcoin - @ February 5, 2026 8:15 am