Sygnum says further Bitcoin decline is possible

Bitcoin could face further price declines amid growing volatility driven by weakened investor confidence and a short-term liquidity crunch, according to Fabian Dori, Chief Investment Officer at crypto bank Sygnum. Dori explained that investor confidence is currently too low to actively build positions, making it likely that BTC volatility will remain high with room for further downside. He attributed the liquidity squeeze to the U.S. Treasury's issuance of short-term bills since June 2025, which has increased the balance of its General Account (TGA) and absorbed market liquidity. This has particularly impacted liquidity-sensitive assets like cryptocurrencies, creating a fragile environment on top of an already precarious market cycle. However, Dori noted that this downturn is more a result of the short-term liquidity issue than a fundamental shift. He added that while inflation remains above the Federal Reserve's 2% target, it is not at a level that would spark major concern. If this moderate trend continues, the Fed could proceed with its rate-cutting cycle in the coming months, which would in turn improve market liquidity conditions.