Citi has lowered its 12-month price forecasts for Bitcoin and Ethereum, citing slower-than-expected progress on U.S. digital asset legislation and weakening demand.
The bank now forecasts Bitcoin to reach $112,000, down from its previous estimate of $143,000, while its Ethereum forecast is $3,175, down from an earlier estimate of $4,304. The two largest cryptocurrencies are currently trading at $74,106 and $2,329, respectively.
Citi analyst Alex Saunders said the revision reflects "reduced potential flows and slower network activity," as well as a reduced likelihood of key legislation passing this year. The likelihood of passage of the Transparency Act has dropped to about 60%, Saunders reported, citing Polymarket data, warning that "the window of opportunity is narrowing."
Cryptocurrency markets are struggling to regain momentum following Bitcoin's October peak, with risk appetite reduced by futures liquidations and the asset trading below key technical levels like the 200-day moving average (MA).
"Concerns about the halving cycle stage and the fact that Bitcoin is trading below technical levels like the 200-day MA reduce urgency for new investors," the analyst wrote.
Flows remain a key driver, particularly through exchange-traded funds (ETFs), although inflows have slowed compared to last year. Citi now projects ETF demand of $10 billion for Bitcoin and $2.5 billion for Ethereum, lower than previous estimates, but still views flows as "the most important positive factor."
The bank continues to consider outcomes across a wide range of scenarios. His bearish forecast, driven by recessionary macroeconomic conditions and weaker stock markets, projects Bitcoin at $58,000 and Ethereum at $1,198. Conversely, a bullish scenario hinges on stronger demand from end investors and wider adoption through financial advisors and brokerage channels.
Saunders noted that token prices are currently trading slightly below levels implied by user activity, following a pullback from last year's highs. Bitcoin is expected to "trade in a range pending legislative news," with around $70,000 seen as a key psychological level associated with pre-election pricing.
For Ethereum, uncertainty is higher, given its sensitivity to network activity and usage trends. Saunders stated that weak user metrics have negatively impacted the forecast, although the development of stablecoins, tokenization, and decentralized finance could support a recovery in demand and valuation over time.