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

On November 7th, Citibank issued a warning that the recent sluggish transaction pattern of Bitcoin might indicate a weakening trend in the Nasdaq 100 Index. Bitcoin's performance has always shown a high degree of correlation with the Nasdaq. When the price is above the 55-day moving average, the return rate of the Nasdaq significantly improves. However, Bitcoin has now dropped below this threshold, and the risk-adjusted returns of the stock market are declining in sync. Analysts attribute the weakness in the crypto market to the tightening of liquidity. Bank reserve balances have decreased by approximately $500 billion since mid-July, draining market liquidity. Nevertheless, the report also points out that Treasury balances are approaching the bottom of previous replenishment cycles, and liquidity may soon improve, thereby boosting the performance of Bitcoin and the stock market.