Citi Says Crypto’s Weakness Stems From Slowing ETF Flows and Fading Risk Appetite

Wall Street bank Citi stated that the recent downturn in the crypto market, despite strong equity performance, is due to several factors. Sharp liquidations in October dampened investor confidence, affecting both leveraged crypto traders and newer spot ETF investors who have since pulled back. A critical pillar supporting Citi's positive outlook, steady inflows into U.S. spot bitcoin ETFs, has sharply slowed. The bank warned that sentiment could remain soft if this momentum doesn't resume, as their forecasts rely on gradual ETF adoption. On-chain data also suggests caution, with fewer large bitcoin holders and declining funding rates indicating waning leverage demand. Technically, Bitcoin falling below its 200-day moving average is a concern, and the weakness is also linked to tightening bank liquidity. Citi concluded that spot ETF flows remain the most crucial indicator for any shift in crypto sentiment.

(Source：CoinDesk)