TechFlow, Nov. 7 — According to CoinDesk, Wall Street giant Citigroup warned that Bitcoin's weak trading pattern could signal a weakening of the Nasdaq-100 Index.
Citigroup analysts noted in a Thursday report that Bitcoin’s trading behavior has historically been closely correlated with the performance of the Nasdaq-100: when cryptocurrency prices are above the 55-day moving average, Nasdaq returns significantly improve. Currently, Bitcoin has fallen below this threshold, and risk-adjusted returns in the stock market have weakened.
The bank's analysts primarily attribute the recent weakness in cryptocurrency to tightening liquidity conditions. The U.S. Treasury rebuilding its cash balance, coupled with a roughly $500 billion decline in bank reserves since mid-July, has drained liquidity and pressured risk assets.
However, the report指出 that Treasury balances are now approaching the level at which rebuilding typically stops, suggesting liquidity may soon improve, potentially boosting both Bitcoin and equities.
