Citi: Bitcoin is approaching support levels ahead of the U.S. elections, and ETF inflows have noticeably slowed down

According to CoinDesk, Citi's analysis indicates that Bitcoin is approaching a key price support level ahead of the U.S. elections.

The report states that after several weeks of decline, the price of Bitcoin has fallen below the bank's estimated average entry cost of approximately $81,600 for the U.S. spot Bitcoin ETF and is nearing the critical level of about $70,000 prior to last year's election.

The report points out that the main new source of demand supporting the market—ETF inflows—has significantly slowed, while the futures market continues to see long positions being liquidated. Analysts note that the cryptocurrency market exhibits volatility similar to that of precious metals but has failed to follow the recent safe-haven rally in gold, highlighting that its price is still primarily influenced by liquidity conditions and risk sentiment rather than safe-haven demand.

The report believes that regulatory progress remains a key potential catalyst, but the advancement of the U.S. digital asset market structure bill has been slow and uneven, leading to diminished expectations. The report also mentions macro risks, including concerns about the Federal Reserve's balance sheet contraction, which historically puts pressure on crypto assets by reducing liquidity in the banking system.