Bitcoin is feeling the effects of a typical second-year post-halving slowdown, with Citigroup warning that ETF outflows and cautious long-term holders are pushing the cryptocurrency toward its bear-case scenario.
In a Friday report, the bank said the October futures-market sell-off severely dented sentiment, triggering nearly $4 billion in redemptions from U.S. bitcoin ETFs and erasing year-to-date gains. With inflows drying up, bitcoin has slipped back toward the average cost basis of ETF investors, now trading closer to Citi’s bearish outlook than its base-case forecast.
Citigroup highlighted growing concern among long-term holders, noting that on-chain data shows older coins moving and major wallets trimming positions—trends that often appear during the historically weak second year of the halving cycle.
Risk appetite across the market has collapsed since the early-October flash crash, which Citi attributes to broader macroeconomic pressures. Analyst Alex Saunders said bitcoin is underperforming its typical market drivers and lacks near-term catalysts unless equities recover or U.S. digital-asset legislation advances.
Although interest hasn’t disappeared, long-term holders remain defensive, and new investors are hesitant to enter while bitcoin trades below key technical levels. Citi had projected roughly $7.5 billion in ETF inflows by year-end, but ongoing outflows now place bitcoin near the bank’s $82,000 bear-case estimate.
The bank identified $80,000 as a critical support level for ETF investors and said that regulatory clarity in 2025 could help restore demand. Citi maintains its 12-month targets of $25 billion in ETF inflows and a bitcoin price of $181,000.
Bitcoin was trading near $86,500 at the time of publication.
