Bitcoin nears pre-election floor as ETF flows stall, Citi says

Core Insights - Crypto markets are nearing critical inflection points after a period of decline, with Bitcoin recently stabilizing around $76,100 after dropping to approximately $73,000, below the estimated average U.S. spot bitcoin ETF entry price of $81,600 [1][2] Market Dynamics - ETF inflows, a significant source of new demand, have decreased substantially, while futures markets are experiencing long liquidations [2] - Bitcoin has not mirrored the recent strength of precious metals like gold, which has rallied due to geopolitical risks and macroeconomic uncertainty, indicating Bitcoin's sensitivity to liquidity conditions rather than being viewed as a safe haven [3] Regulatory Environment - Regulation is identified as a key potential catalyst for market movement, but progress on a U.S. digital asset market structure bill has been slow, with ongoing Senate negotiations facing delays and mixed political support, negatively impacting market sentiment [4] Macro Risks - Concerns regarding a shrinking Federal Reserve balance sheet are highlighted, as this historically reduces bank liquidity and could weigh on crypto markets [5] - While fears of a prolonged crypto winter are increasing, it is noted that this remains a tail risk rather than the base case scenario [5] Market Positioning - With average ETF holders currently underwater and Bitcoin approaching the $70,000 level it held before the U.S. presidential election, markets are nearing decisive levels that could influence near-term direction [6]