Citi warned that Bitcoin's weak sentiment will persist as spot ETF flows turn negative and prospects for a US crypto market structure bill fade.
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Bitcoin holds near $67,000 as Citi warns of fading investor demand
Citi warned that Bitcoin's weak sentiment will persist as spot ETF flows turn negative and prospects for a US crypto market structure bill fade.
Bitcoin traded near $67,200 as Citi warned that weak sentiment will persist, citing negative ETF flows and fading prospects for a US crypto market structure bill that could have renewed investor interest.
"Recent flows have been negative, and the chances for the passage of a US market structure bill are diminishing," Alex Saunders, an analyst at Citi, said in a report Tuesday.
The bank estimated spot Bitcoin ETF flows explain roughly 45% of weekly BTC price moves and remain the best gauge of investor adoption. Strategy's sale of a small portion of its Bitcoin holdings — the first in four years — was part of a previously disclosed tax-optimization plan flagged during its first-quarter earnings call, Citi said, and does not alter the firm's broader strategy.
The widening gap between Bitcoin and equities shows the macro headwinds facing scarce assets. Bitcoin has underperformed the Nasdaq-100 by 70 percentage points over the past year, the widest gap since March 2019, as rising bond yields draw capital away from non-yielding assets.
Options Market Turns Bearish
The shift in sentiment extends beyond ETF flows. Options volumes in key crypto equities turned bearish Tuesday, with put volumes outpacing calls in both the iShares Bitcoin Trust and Strategy. In Strategy, almost 100,000 puts were likely bought compared with fewer than 37,000 calls, according to ThinkOrSwim data. The most popular contract was the 100-strike put expiring June 18 — a bet on new year-to-date lows.
Without a near-term trigger such as a US market structure bill or renewed concerns about fiscal sustainability, Citi expects sentiment to remain subdued. The combination of negative ETF flows, rising yields and a lack of fresh investor demand leaves Bitcoin exposed to further downside, with the $60,000 level emerging as the next key support.
This article is for informational purposes only and does not constitute investment advice.
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