A wave of geared long liquidations has exposed Bitcoin’s Equity sensitivity according to Wall Street Bank Citigroup.
The bank said that worsening of merchant tensions in US-China triggered a sharp futures sale on Friday that spilled in crypto, emphasizing its volatility and connection with shares.
Both crypto and stock markets have since itched some losses, noted the report. The world’s largest cryptocurrency traded about $ 111,700 upon publication time.
A violent flash accident hit crypto markets on Friday and deleted more than $ 500 billion in value and forced nearly $ 20 billion in liquidation across derivatives. Bitcoin fell as much as 13% in one hour before the bottom near $ 102,000.
Citi said the Exchange-Traded Fund (ETF) influx remained resilient, probably driven by newer, less geared investors, and that does not expect the liquidations to derive demand.
Bitcoin and Ether remain near September levels, and the bank kept its 12-month target of $ 181,000 for BTC and $ 5,400 for ETH, with the end of the year after $ 133,000 and $ 4,500.
Citi said sustained ETF streams support the basic case, while the Bear case depends on the weakness of the equity market.
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