U.S. bank Citigroup (C) sees more downside ahead for cryptocurrencies as investors’ risk tolerance fades and financial markets grow increasingly volatile.
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Analysts note that leading cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have been weak since the Oct. 10 market selloff that occurred when U.S. President Donald Trump threatened 100% tariffs on Chinese imports into America.
Since the Oct. 10 decline, cryptocurrencies have remained weak, with Bitcoin’s price recently falling below $100,000 for the first time since June of this year. Cryptocurrency exchange-traded funds (ETFs) have experienced steady outflows as shaken investors pull their capital and lessen their risk exposure.
Pillar of Support
Citigroup says that the outflows from Bitcoin and Ethereum ETFs have undermined a critical pillar of support for cryptocurrencies and the broader market for digital assets. As such, analysts at Citigroup expect that investor sentiment towards crypto will remain soft heading into next year.
The bearish report from Citigroup also notes that Bitcoin doesn’t look good from a technical standpoint. BTC recently fell below its 200-day moving average (SMA), a level Citigroup says could further suppress investor demand.
Is Bitcoin a Buy?
Most analysts don’t offer ratings or price targets on Bitcoin. So instead, we’ll look at the three-month performance of BTC. As one can see in the chart below, the price of Bitcoin has fallen 10.99% in the last 12 weeks.
