Citigroup: Bitcoin's recent weakness may portend a Nasdaq 100 trend reversal

BlockBeats News, November 7th, Citibank warned that Bitcoin's recent sluggish transaction pattern may indicate a weakening trend in the Nasdaq 100 Index. Bitcoin's performance has always been highly correlated with the Nasdaq—when the price is above the 55-day moving average, the Nasdaq's return rate significantly improves. However, Bitcoin has now fallen below this threshold, and stock market risk-adjusted returns are declining in sync.

Analysts attribute the weakness in the crypto market to liquidity tightening, with bank reserve balances having decreased by about $500 billion since mid-July, draining market liquidity. However, the report also points out that Treasury balances are approaching the bottom of previous replenishment cycles, and liquidity may soon improve, thereby boosting Bitcoin and stock market performance.