Citi Report: Bitcoin Leveraged Liquidations Reveal Strong Equity Market Correlation, BTC Price Analysis

According to Citigroup's latest research, massive leveraged long liquidations have demonstrated Bitcoin's significant sensitivity to equity markets. The Wall Street bank reported that escalating U.S.-China trade tensions triggered substantial futures selling that rapidly spread to cryptocurrency markets, highlighting BTC's volatility and strong correlation with traditional stocks. Despite both cryptocurrency and equity markets recovering from recent losses, Bitcoin experienced a dramatic flash crash that wiped over $500 billion from the crypto market capitalization and caused approximately $20 billion in leveraged position liquidations. BTC plummeted 13% within one hour, briefly touching $102,000 before stabilizing near $111,700. Citigroup analysts noted that Bitcoin ETF inflows have remained surprisingly resilient, likely supported by new, less-leveraged investors entering the market. The bank maintains its bullish 12-month price targets of $181,000 for Bitcoin and $5,400 for Ethereum, with year-end forecasts of $133,000 for BTC and $4,500 for ETH. The report emphasizes that sustained ETF flows support their base case scenario, while potential bearish outcomes would require significant equity market weakness. Citi doesn't expect recent liquidations to substantially impact long-term Bitcoin demand.