Citi Bank says the recent downturn in cryptocurrency markets reflects fading investor appetite, weaker exchange-traded fund (ETF) inflows, and technical deterioration despite strong equity performance.
In a report released Tuesday, analysts Alex Saunders and Nathaniel Rupert said October’s sharp liquidations dented confidence among both leveraged traders and new ETF investors, causing a slowdown in U.S. spot Bitcoin ETF inflows — a key driver of bullish sentiment earlier this year.
On-chain data shows that large Bitcoin holders have been reducing their positions while retail wallets increase, suggesting profit-taking by long-term investors.
Citi bank says it wants to be an on-ramp to the Bitcoin and crypto economy
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Bitcoin’s drop below its 200-day moving average further signals fragile momentum, Citi said, adding that tight banking liquidity and high short-term rates are weighing on demand.
Citi warned that sustained ETF inflows are crucial to reversing sentiment, calling them the “main signal” to watch for any recovery in the crypto market.
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TIPP Staff
