The bank noted that overall positioning remains stable, but pointed out that this "masks the growing imbalance in the Nasdaq, where long positions remain overvalued despite increasing losses, making the market vulnerable to further liquidation of longs."

Citi noted that approximately 80% of long positions in the Nasdaq are currently in the red, highlighting the increased vulnerability to further position cuts.

Meanwhile, Russell 2000 positioning continues to grow due to new risk flows and short position closures, with bullish positioning reaching extended levels.

Citi noted that "profit levels on positions are low, which limits position risks."

In Europe, the bank reported a weakening of flows, with renewed short position growth and long position closures returning positioning to neutral levels for the EuroStoxx and DAX indices.

Citi analysts believe that this "indicates fragile confidence and limited growth potential without a sustained improvement in flows." The FTSE was described as an exception, with modest long position growth and limited profit on positions.

In Asia, Citi reported that the KOSPI's positioning remains bullish and extended, despite the recent market decline, while the Hang Seng represents the "most extreme bearish position in the world," dominated by profitable short positions, making the index vulnerable to increasing short squeeze risk.