Bitcoin (BTC) Weakness Sends a Warning to Stocks, Citi (C) Says

Wall Street giant Citi noted that Bitcoin's recent weakness, specifically falling below its 55-day moving average, serves as a warning sign for the stock market, as the crypto's performance historically mirrors the Nasdaq 100. Analysts attribute this crypto slump primarily to tightening liquidity conditions caused by the U.S. Treasury rebuilding its cash balance and declining bank reserves. While equities have been temporarily supported by the AI boom, Bitcoin reacts faster to liquidity shifts. However, Citi suggests relief is near, as Treasury balances are nearing levels where rebuilding typically halts, potentially improving liquidity for both Bitcoin and stocks. Furthermore, Citi observes that tech giants are increasingly using debt markets to fund AI buildouts, echoing the dot-com era, but concludes this reflects opportunity rather than immediate stress, while cautioning that the shift from cash to credit is generally negative for bondholders.

(Source：CoinDesk)