Citi: Crypto Weakness Stems from Slowing ETF Inflows and Weakened Risk Appetite

Jinse Finance reported that Wall Street bank Citi stated that although the stock market has performed strongly, the cryptocurrency market has recently weakened again, with significant liquidations in October undermining investor confidence. The wave of sell-offs has reduced the risk appetite of leveraged traders and new spot ETF investors, with the latter already withdrawing their investments. Recently, capital inflows into US spot Bitcoin ETFs have dropped sharply, weakening a key factor supporting the market’s optimistic outlook. Citi originally predicted that as financial advisors and others increased their Bitcoin exposure, ETF inflows would continue, but now the momentum has stalled and market sentiment may remain subdued. On-chain data has also added to the cautious atmosphere: the number of large Bitcoin holders has decreased, the number of small retail wallets has increased, and funding rates have declined, indicating that long-term investors may be selling and leveraged demand is also weakening. On the technical side, Bitcoin has fallen below its 200-day moving average, which may further suppress demand. Citi also linked Bitcoin’s weakness to tightening bank liquidity. The report concludes that spot ETF capital flows are a key signal to observe shifts in cryptocurrency market sentiment.