According to ChainCatcher citing CoinDesk, Citi analyst Alex Saunders stated in a new report that while Strategy's recent Bitcoin sale caused some market turbulence, the deeper issue is a clear lack of new investor demand. The sale was part of a previously disclosed tax optimization plan and does not represent a strategic shift in the company's long-term Bitcoin holdings.
Persistent ETF Outflows Signal Weak Demand
The report emphasized that the sustained outflow from spot Bitcoin ETFs is a more alarming signal. As of now, spot ETFs have recorded net outflows for 11 consecutive trading days—a streak rarely seen since the products launched—which Saunders views as a clear indicator of weak investor adoption appetite. This persistent outflow reflects slowing institutional entry and insufficient new retail funds, leaving the market starved for incremental capital.
Furthermore, Saunders' quantitative analysis shows that ETF flows can explain approximately 45% of Bitcoin's weekly price volatility, underscoring the strong influence of external capital flows on short-term price movements. With net outflows continuing, Bitcoin's upward momentum has been notably constrained, making sustained rebounds difficult.
Regulatory Catalyst Fades, Sentiment Remains Under Pressure
Beyond funding weakness, regulatory tailwinds are also fading. The report notes that the probability of the U.S. crypto market structure bill passing this year is declining. The bill was expected to provide a clearer compliance framework for crypto assets and was seen as a major potential positive catalyst. With the legislative process stalling, the likelihood of a meaningful policy breakthrough in the near term has diminished significantly.
Citi concludes that with regulatory progress stalled and fresh capital inflows absent, Bitcoin market sentiment will remain subdued. The lack of clear upside drivers, combined with the fundamental shortfall in new demand, is likely to keep Bitcoin's price action under pressure, with any rebounds potentially short-lived.