In a new report examining the factors behind Bitcoin’s recent price weakness, Citi argued that investors may be focusing on the wrong catalyst. The bank stated that the small Bitcoin (BTC) sale carried out by Michael Saylor-led Strategy does not signal a shift in the company’s long-term accumulation strategy. Instead, Citi views the transaction as part of tax planning and broader portfolio management efforts.
ETF Flows Remain the Key Driver
Citi analyst Alex Saunders emphasized that spot Bitcoin ETF flows continue to play a crucial role in determining Bitcoin’s price direction. According to the report, approximately 45% of Bitcoin’s weekly price movements can be linked directly to ETF inflows and outflows. With ETF flows turning negative in recent weeks and fresh investor demand fading, the market has struggled to maintain bullish momentum.
Regulatory Uncertainty Adds More Pressure
The report also highlighted growing doubts over the passage of a major U.S. crypto market structure bill that many investors expected to boost institutional participation. Citi believes the lack of regulatory clarity is limiting new capital inflows and reducing enthusiasm among institutional investors. The bank argued that ETF flows remain a more reliable measure of market adoption than sales conducted by digital asset treasury companies. As a result, Bitcoin may continue to face pressure until a new catalyst emerges that can revive investor demand and attract fresh capital into the market.
