The outlook for Bitcoin remains optimistic, with projections from Citi suggesting that the cryptocurrency price could reach as high as $143,000 within the next year. This forecast is largely driven by the anticipated growth of adoption through exchange-traded funds (ETFs) and the prospect of a more favorable regulatory landscape in the U.S. Analysts at Citi established $143,000 as their base-case target but also outlined a bullish scenario in which Bitcoin could exceed $189,000. Conversely, they noted a bearish case where Bitcoin might decline to around $78,500 if macroeconomic conditions worsen.
Currently, Bitcoin is trading near $88,000, reflecting a decrease of approximately 30% since its peak in late October. This drop came in the wake of a substantial sell-off that followed earlier gains throughout the year. Notably, outflows from spot Bitcoin ETFs have slowed in recent weeks, indicating a potential stabilization in the market. Alex Saunders, head of global quantitative macro strategy at Citi, highlighted that their forecasts rely heavily on the assumption that investor adoption will continue, with an expected inflow of about $15 billion into ETFs boosting Bitcoin prices.
Regulatory clarity in the United States is viewed as another significant factor that may drive future demand for Bitcoin. The U.S. Senate is currently deliberating on its version of the Clarity Act, aimed at placing Bitcoin under the oversight of the Commodity Futures Trading Commission (CFTC). Citi analysts believe that clearer regulations could foster broader institutional participation in the crypto market.
The bearish scenario outlined by Citi takes into account potential recessionary pressures and a declining appetite for risk assets. Bitcoin faced noteworthy declines in November, dropping over $18,000 that month, marking the most significant dollar loss since May 2021, influenced by heavy investor withdrawals amid concerns regarding technology valuations and other macroeconomic risks.
In a notable shift, traditional banks are increasingly embracing Bitcoin. The Bank of America recently advised its wealth management clients to allocate between 1% and 4% of their portfolios to digital assets. This policy change empowers over 15,000 advisers across Merrill, Bank of America Private Bank, and Merrill Edge to recommend cryptocurrency investments proactively. Additionally, PNC Bank has launched direct spot Bitcoin trading for eligible Private Bank clients, enabling them to buy, hold, and sell Bitcoin through its digital banking platform, leveraging Coinbase’s infrastructure.
From a technical perspective, Bitcoin’s latest sell-off highlights a market entrenched in consolidation, where favorable macroeconomic catalysts have been unable to maintain upward momentum. After touching nearly $89,000, buoyed by lower-than-expected U.S. inflation data, Bitcoin saw a pullback towards the $84,000 range, extending a correction that has now persisted for two months. Trends indicate that positive developments often lead to quick pullbacks, as sellers defend resistance levels below $90,000.
While recent mixed macro signals have provided some support, uncertainties remain. The Consumer Price Index (CPI) in November eased to 2.7% year over year, with core inflation at 2.6%, which could encourage the Federal Reserve to consider rate cuts in 2026. However, rising unemployment and uneven job growth complicate the economic outlook, suggesting that the Fed is likely to proceed with caution. Meanwhile, U.S.-listed spot Bitcoin ETFs have transitioned from a phase of consistent inflows to net redemptions, removing a stabilizing factor that previously absorbed sell pressure.
Bitcoin’s price remains confined within a range, with resistance just below $90,000 and waning support near $84,000. A significant breach below these levels could pave the way for a move toward the $72,000 to $68,000 area, where analysts anticipate stronger buying pressure. Although extreme fear readings suggest Bitcoin might be undervalued, the prevailing momentum seems to favor sellers. As of now, Bitcoin prices hover around the $88,000 mark.
