Citigroup lowered its price target for Bitcoin over the next 12 months from $143,000 to $112,000. Similarly, the bank revised its forecast downwards for Ethereum, reducing its forecast from $4,304 to $3,175. It is stated that delays in regulatory developments are effective in this update.
Regulatory Agenda and Corporate Demand in the US
Alex Saunders, strategist at Citigroup, points out that regulatory steps have not been taken at the expected pace, especially in the USA, despite post-election expectations. Saunders emphasizes that with the market delaying important legislation that is expected to be implemented in 2025, the time window for a new wave of institutional demand through ETFs is narrowing. The lack of clear regulations and framework for stablecoins creates uncertainty for institutional capital inflow.
Citigroup had recently created a much more optimistic “bull scenario”, in which an upper target of $189,000 was predicted for Bitcoin with rapid policy changes. However, since these conditions were not met in the current situation, a more cautious approach was adopted.
Market Dynamics and Behavior of Large Portfolios
Bitcoin price is currently consolidating below the $90,000 level. Citigroup states that the main risk in the market is the slowness of regulatory steps. In contrast, BlackRock, one of the world’s largest asset managers, recently purchased $600 million worth of Bitcoin.
According to on-chain data provided by Santiment, selling pressure from short-term investors is being absorbed as major bitcoin wallets enter the accumulation process again. The accumulation of long-term large portfolios is generally observed in the pre-rise period. However, Citigroup points out that possible price increases may be postponed over time unless there is a rapid improvement in the regulatory environment.
According to Citigroup’s assessment, “Due to the blockage of the process in the US Congress and the delay in legal regulations, new ETF-based capital inflows may be postponed until the end of 2026.”
Bullish scenario in terms of price; It indicates that the upward momentum could accelerate if Bitcoin regains the $92,000 level with strong volumes. A positive return on ETF investments and a dovish signal from the US Federal Reserve are among the necessary conditions for Citigroup’s updated target of $112,000.
Conversely, if there is a break below $84,000, the price could decline to the $72,000 to $70,000 band. The target in Citigroup’s negative scenario is at $78,500. The most critical data in this process will be fund flows to spot ETFs.
If fund inflows remain stable, the updated target of $112,000 may remain difficult to reach. On the other hand, if weekly billion-dollar inflows occur again, the previous target of $143,000 could come into play.
As of now, the market is waiting to see which scenario will come to the fore with the dynamics of the legal process in the US. Without a clear regulatory signal in the short term, it seems difficult for Bitcoin price to determine a serious direction.
