Citigroup Lowers Bitcoin and Ether Forecasts: Impact of Stalled Legislation on Crypto News

Crypto market news is being impacted by significant changes in investment banking projections. Citigroup recently announced a major adjustment to its 12-month price targets, reflecting a less favorable regulatory outlook in the United States and a weakening market momentum.

Downward Revision of Price Targets for BTC and ETH

The Wall Street investment bank substantially lowered its forecasts. Bitcoin, which was trading around $70,860 (up +4.71% in 24 hours), now has a 12-month price target of $112,000, down from the previous estimate of $143,000. For Ether, the projection was reduced from $4,304 to $3,175, while the main cryptocurrency was approximately $2,160 with a +5.89% increase over the day.

Despite these downward adjustments, Citigroup maintains that there is significant bullish potential. However, bank analysts noted that current market conditions have generated volatility, with Bitcoin oscillating below key technical levels and Ether lagging due to weakening on-chain activity.

ETF Flows: Main Support but with Lower Expectations

Inflows through exchange-traded funds continue to be the most important upward driver, although the bank has lowered its demand assumptions. Citigroup now projects $10 billion in inflows for Bitcoin and $2.5 billion for Ether over the next 12 months, below its previous estimates.

Analyst Alex Saunders highlighted in the bank’s report that “ETF demand remains the most important positive factor,” despite recent inflows showing only modest growth amid geopolitical uncertainty and broader macroeconomic turbulence. This phenomenon reflects the resilience of institutional investors, who have maintained their appetite for cryptocurrency investments even under pressure.

U.S. Legislation: Growing Obstacle for the Crypto Market

U.S. regulation emerged as a critical factor in the analysis. According to the bank, the probability of passing legislation on digital assets this year has fallen to about 60%, indicating that the window of opportunity is closing significantly.

The CLARITY Act, a comprehensive bill on the structure of the crypto market, was approved by the House of Representatives but remains stalled in the Senate. This delay is crucial because the regulation would establish clear classifications for digital assets and define regulatory jurisdictions, resolving a long-standing dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Such regulatory clarity is considered essential by institutional investors before making significant capital allocations.

Market Outlook Under Multiple Scenarios

Citigroup presents an analysis of three scenarios. In the bullish case, the bank projects $165,000 for Bitcoin and $4,488 for Ether, driven by stronger adoption by retail investors through ETFs. The bearish scenario, amid recessionary macroeconomic conditions, suggests lows of $58,000 for BTC and $1,198 for ETH.

Ether’s outlook faces greater uncertainty due to its sensitivity to on-chain activity, which has recently shown weakness. However, bullish opportunities could arise from growth in stablecoins, tokenization trends, and potential favorable regulation in the DeFi sector.

Technical Dynamics and Market Sentiment

Recent crypto news shows shifts in market indicators. Open interest has stabilized with normalized funding, while options skew and backwardation indicate increasing demand for short-term downside protection.

Altcoins gained traction, with QNT and FET leading gains and improving the altcoin seasonal index, although major coins remain confined to limited ranges. These movements reflect a bifurcation in market behavior, where limited optimism in Bitcoin coexists with a search for yield in alternative projects.