Bitcoin is navigating a second-year post-halving slump, with Citigroup warning that ETF outflows and cautious long-term holders are pushing the cryptocurrency closer to its bear-case scenario.
In a Friday report, the bank said October’s futures-market sell-off dealt a serious blow to sentiment, driving nearly $4 billion in U.S. bitcoin ETF redemptions and erasing year-to-date gains. With inflows slowing, bitcoin has fallen back toward the average cost basis of ETF investors, trading more in line with Citi’s bearish outlook than its base case.
Citigroup highlighted rising caution among long-term holders, noting on-chain data showing older coins moving and large wallets reducing positions—a pattern typical during the historically weak second year of the halving cycle.
Risk appetite has evaporated since the early-October flash crash, which Citi attributed to broader macroeconomic stress. Analyst Alex Saunders noted that bitcoin is underperforming its usual market drivers and lacks near-term catalysts unless equities recover or U.S. digital-asset legislation advances.
While long-term interest remains, holders are defensive, and new investors see little incentive to buy at current technical levels. Citi had initially forecast $7.5 billion in ETF inflows by year-end, but ongoing outflows now place bitcoin near its $82,000 bear-case target.
The bank identified $80,000 as a key support level for ETF investors and said that regulatory clarity in 2025 could restore inflows. Citi maintained its 12-month projections: $25 billion in ETF flows and a bitcoin price of $181,000.
Bitcoin was trading around $86,500 at the time of publication.
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