Leveraged Liquidations Underscore Bitcoin’s Equity Sensitivity, Citi Says

Core Insights - A wave of leveraged long liquidations has highlighted Bitcoin's (BTC) sensitivity to equity markets, driven by escalating U.S.-China trade tensions [1] - A significant flash crash in crypto markets resulted in a loss of over $500 billion in value and nearly $20 billion in liquidations across derivatives platforms [2] - Bitcoin's price experienced a sharp decline of up to 13% within an hour, reaching a low near $102,000 before recovering [2] - Despite the volatility, ETF inflows have remained strong, indicating resilience among newer, less leveraged investors [2] - Citigroup maintains its 12-month price targets of $181,000 for BTC and $5,400 for ETH, with year-end forecasts of $133,000 and $4,500 respectively [3] - Sustained ETF flows are seen as supportive for the base case, while potential equity market weakness poses risks to the outlook [3]