Citibank: The weakness in cryptocurrencies is due to a slowdown in ETF inflows and a decrease in risk appetite

According to CoinDesk, Wall Street bank Citigroup stated that although the stock market is performing strongly, the cryptocurrency market has weakened again recently, with significant liquidations in October undermining investor confidence.

The sell-off has led to a decrease in risk appetite among leveraged traders and new spot ETF investors, the latter of whom have withdrawn their investments. Recently, the inflow of funds into U.S. spot Bitcoin ETFs has significantly decreased, weakening a key factor that supports the market's optimistic outlook. Citigroup had originally predicted that as financial advisors increased their Bitcoin exposure, ETF funds would continue to flow in, but now the momentum has stalled, and market sentiment may remain subdued.

On-chain data has also added to the cautious atmosphere, with a decline in the number of large Bitcoin holders and an increase in the number of small retail wallets, while financing rates have decreased, indicating that long-term investors may be selling off, and leverage demand is also weakening. Technically, Bitcoin has fallen below the 200-day moving average, which may further suppress demand. Citigroup also linked Bitcoin's weakness to tightening bank liquidity. The report concludes that the flow of funds into spot ETFs is a key signal for observing shifts in cryptocurrency market sentiment.