Citi, one of the world's largest banking institutions, has dramatically lowered its price forecasts for Bitcoin and Ethereum, citing a critical shift in the crypto market: exchange-traded funds (ETFs), which have been a major source of buying pressure, have now turned into a source of selling pressure. The bank cut its 12-month Bitcoin forecast to $82,000 from $112,000 and lowered its Ethereum target to $2,240 from $3,175.

Why Are ETF Flows So Important to Crypto Prices?

ETFs are investment funds that track the price of an underlying asset, in this case Bitcoin or Ethereum. When institutions and retail investors buy crypto ETFs, that buying pressure typically pushes prices higher. Conversely, when ETF holders sell their shares, it creates selling pressure. Citi's analysis reveals that ETF flows, which have been one of the main drivers of crypto prices during this market cycle, have now turned negative, removing a key source of upward momentum.

As of the time of Citi's analysis, Bitcoin was trading near $58,860, its weakest level since September 2024 and more than 50% below its October all-time high. Ethereum was trading near $1,586, its lowest level since April 2025. Both assets are now trading below their respective long-term moving averages, a technical indicator that many traders view as a bearish signal.

What Factors Are Driving the Pessimistic Outlook?

Citi's bearish forecast extends beyond just ETF flows. The bank identified several headwinds pressuring crypto demand and prices:

• Negative ETF Flows: Investor demand has weakened significantly, with ETF inflows now turning negative and expected to remain at zero over the next year.
• Regulatory Uncertainty: Slow progress toward comprehensive cryptocurrency regulatory laws in the United States has reduced investor confidence and interest in the market.
• Digital Asset Selling: Growing concerns about selling of Bitcoin by digital asset treasuries are putting additional pressure on prices.
• Competing Investment Demand: Increased investment in artificial intelligence tokens has diverted capital away from traditional crypto assets like Bitcoin and Ethereum.

Under a recessionary macroeconomic scenario combined with continued ETF outflows, Citi expects Bitcoin to drop to $53,000 and Ethereum to fall to $1,094 by 2027. These forecasts represent further downside from already-depressed levels.

How Are Analysts Interpreting the Current Market Dynamics?

Not all analysts agree on the severity of the downturn. PlanB, the creator of the influential Stock-to-Flow model, acknowledged that Bitcoin could fall further but maintained a long-term bullish view on valuation. PlanB noted that Bitcoin's price and its fundamental valuation should be treated separately, suggesting that while Bitcoin appears undervalued at current levels, price could still decline below the realized price, which measures the approximate market-wide cost basis at roughly $52,000.

"You are mixing up valuation and price. My view is that both are true, valuation (based on fundamentals like scarcity, S2F) is 250k-1m range, but price can differ. Right now price is much lower than value and indeed might go lower from here (below realized). So bitcoin is undervalued but can still go lower," said PlanB.

PlanB, Crypto Analyst

PlanB emphasized that all previous bear market bottoms in Bitcoin's history have fallen below the realized price, suggesting the current downturn may not yet be complete.

Ki Young Ju, founder of CryptoQuant, offered a broader perspective on the structural challenge facing Bitcoin. He noted that Bitcoin now requires substantially more capital to move prices compared to earlier cycles. In 2011, it took only $5 million in net inflows to double Bitcoin's price, whereas in the current cycle it required roughly $101 billion. Ju suggested that the next major price cycle "will likely require trillions" in net inflows, indicating that Bitcoin needs deeper institutional adoption rather than another retail-led ETF trade.

What Does This Mean for Crypto Market Participants?

The collapse in ETF demand signals a significant shift in market dynamics. For years, crypto advocates pointed to ETF inflows as evidence of growing institutional adoption and mainstream acceptance. The reversal of these flows suggests that institutional investors are either taking profits, reassessing their crypto allocations, or waiting for clearer regulatory and macroeconomic signals before committing fresh capital.

Citi's analysis indicates that broader crypto adoption is likely to remain paused until a new catalyst emerges, leaving the market dependent on bigger catalysts to reignite investor interest. This stands in contrast to the narrative of steady institutional accumulation that dominated crypto markets in 2024 and early 2025.

The divergence between long-term valuation models and near-term price action reflects a market in transition. While some analysts maintain that Bitcoin and Ethereum are fundamentally undervalued, the absence of ETF buying pressure and the presence of multiple headwinds suggest that prices may need to fall further before attracting fresh institutional capital.