Citi Cuts Bitcoin, Ether Forecasts as ETF Flows Turn Negative

💡 Citi slashes forecasts for bitcoin and ether as ETF flows turn negative, sparking concerns about market sentiment.

The Federal Reserve delivered a hawkish surprise on Wednesday, signaling that interest rate cuts remain further away than markets had hoped. Fed Chair Jerome Powell told reporters that the central bank needs "greater confidence" that inflation is sustainably declining before it will consider easing policy.

The 10-year Treasury yield surged to 4.8% in the aftermath, its highest level since October 2023. $TLT fell sharply as bond traders repriced the timing of the first cut from March to June.

Citi Lowers Bitcoin and Ether Forecasts

Citi analysts have lowered their forecasts for bitcoin and ether, citing a decline in ETF flows and a shift in market sentiment. The bank now expects $BTC to trade at $22,000 by the end of the year, down from its previous forecast of $28,000. For ether, Citi has lowered its forecast to $1,500, down from $2,000.

ETF Flows Turn Negative

ETF flows have turned negative in recent weeks, with investors withdrawing funds from both bitcoin and ether ETFs. This decline in investor interest has sparked concerns about market sentiment and the potential for further price declines. $GLD, the gold ETF, has seen significant inflows in recent weeks, as investors seek safe-haven assets.

What It Means for Investors