According to a recent report by Citi, the cryptocurrency market is expected to remain closely correlated with stock movements, particularly amid upcoming macroeconomic events. The research highlights a notable decline in demand for digital assets, leading to underperformance compared to other risk assets.
Citi analysts, led by David Glass, observed significant net outflows from Bitcoin (BTC) and Ethereum (ETH) ETFs, indicating waning investor interest. Layer-1 blockchain activity has stagnated, and low funding rates reflect a lack of demand for bullish positions. The report suggests that as macroeconomic indicators, such as the Nonfarm Payrolls report, unfold, the crypto market will likely continue to mirror stock market trends.
This downturn is further evidenced by reduced energy consumption among Bitcoin miners and overall weaker production cost models, signaling a potential slowdown in the sector.
