Overview#
Citi has revised its 12-month price targets for Bitcoin and Ethereum, attributing the changes to slower-than-expected progress on U.S. digital asset legislation and a decrease in demand. The new forecasts reflect a cautious outlook for the two largest cryptocurrencies.
New Price Targets#
The bank now predicts Bitcoin will reach $112,000, down from a previous estimate of $143,000. For Ethereum, the forecast has been lowered to $3,175 from $4,304. Currently, Bitcoin is trading at $74,106, while Ethereum is at $2,329.
Legislative Concerns#
Citi analyst Alex Saunders highlighted that the revisions are due to “reduced potential flows and a slowdown in network activity.” He noted that the chances of significant legislation, such as the Clarity Act, passing this year have dropped to around 60%. This uncertainty has contributed to a lack of momentum in the crypto markets.
Market Dynamics#
The cryptocurrency market has faced challenges since Bitcoin peaked in October, with risk appetite affected by futures liquidations. Bitcoin is currently trading below important technical levels, including the 200-day moving average (MA), which has diminished the urgency for new investors. Citi estimates that ETF demand for Bitcoin will be around $10 billion and $2.5 billion for Ethereum, both lower than previous forecasts, but still views these flows as crucial for market support.
Future Outlook#
Citi presents a range of scenarios for future price movements. In a bear case, influenced by economic downturns, Bitcoin could drop to $58,000 and Ethereum to $1,198. Conversely, a bull case relies on increased demand from end-investors and broader adoption through financial advisors. Saunders noted that current token prices are slightly below levels suggested by user activity, and Bitcoin is expected to trade within a range as it awaits legislative developments.