Core Insights - The report from Citigroup indicates that the recent liquidation event on October 10 may have negatively impacted investor risk appetite, with a noticeable slowdown in the inflow of funds into U.S. spot ETFs over the past few weeks [1][20] - On-chain indicators show that Bitcoin whales are gradually reducing their holdings, while smaller retail wallets are increasing their holdings, reflecting a shift in market dynamics [1][6] - The current price of Bitcoin has fallen below the 200-day moving average, which may further suppress demand [1][17] Group 1: Bitcoin's Four-Year Cycle - Bitcoin's four-year cycle theory is based on its halving mechanism, which reduces the block reward for miners approximately every four years, creating predictable supply shocks that historically lead to price increases [2] - Historical patterns show that Bitcoin typically reaches a cyclical peak about 18 months after each halving, followed by a bear market adjustment [3] - Some research institutions suggest that the Bitcoin market may be evolving beyond the traditional four-year cycle due to increased institutional participation and the introduction of spot ETFs, leading to a more mature market structure [3] Group 2: Current Market Adjustments - Bitcoin has experienced a significant price drop of approximately 20% since its historical high in early October, coinciding with the tail end of the four-year cycle [4] - On-chain data indicates that whales have sold a total of 147,000 Bitcoins, valued at around $16 billion, since August, while the number of addresses holding over 1,000 Bitcoins is decreasing [7] - The current market structure is shifting from a "whales selling to retail" model to "old whales transferring assets to new long-term holders," such as institutions and ETFs, which may lead to a more prolonged but milder price adjustment [10] Group 3: Liquidity Crisis and Government Shutdown - The liquidity crisis triggered by the U.S. government shutdown has exacerbated the depth and duration of Bitcoin's price adjustment [11] - The Treasury General Account (TGA) balance has surged to over $1 trillion, pulling significant liquidity from the market, which has a direct impact on Bitcoin as a risk asset [12][13] - The increase in TGA balance is attributed to a combination of factors, including the government shutdown and ongoing debt issuance, leading to a tightening of market liquidity [16] Group 4: Future Outlook - The potential reopening of the U.S. government could release significant liquidity back into the market, which may trigger a large-scale buying spree for risk assets, including Bitcoin [19][21] - Analysts predict that once the government reopens, the release of pent-up liquidity could act as a catalyst for a strong rebound in Bitcoin and other liquidity-sensitive assets [21]