Main Points :
- The investment bank Citigroup warns that the ongoing “halving-season freeze” in the Bitcoin market has been exacerbated by outflows from Bitcoin spot ETFs approaching nearly US$4 billion since October 10.
- In their view, long-term holders are becoming increasingly cautious as the second year of the halving cycle historically tends to be weaker, and on-chain evidence shows older Bitcoin supply moving and large wallets reducing positions.
- Citigroup estimates that each US$1 billion in ETF outflows correlates with a roughly 3.4% decline in Bitcoin’s price.
- Without renewed ETF inflows, Bitcoin is drifting toward a year-end bear-case scenario of around US$82,000. Citigroup’s base case remains bullish for the medium-term but hinges on regulatory developments and institutional demand revival.
- Other recent data show that November’s outflows are among the worst on record for Bitcoin spot ETFs, with the largest U.S. fund (IBIT from BlackRock) losing billions and Bitcoin’s price falling from October highs above US$120,000 into the US$80,000-90,000 range.
1. Halving Season Landscape
Historically, the Bitcoin network undergoes a “halving” event roughly every four years—when the block reward is cut in half, reducing the rate at which new Bitcoin enters circulation. That event often catalyses a bullish cycle, but market participants also observe that the second year after a halving tends to feature weaker momentum compared to the more explosive post-halving run. Citigroup now warns that this exact pattern is unfolding: the market is entering a “halving-season chill”.
From October 10 onwards, Citigroup notes that Bitcoin spot ETF outflows in the U.S. have approached US$4 billion, eroding sentiment and reducing the cushion of fresh institutional capital. With less new money entering the system, the average cost basis of ETF holders becomes relevant—if the market trades near those levels, they may become sellers rather than holders.
For investors seeking the next crypto asset or business opportunity, this phase matters: it signals that the usual “post-halving sprint” may be delayed or muted, so chasing Bitcoin exactly now might carry higher risk. Instead, smaller-cap altcoins or infrastructure plays may offer asymmetric reward if they are under-followed and ready to benefit when institutional flows return.
2. ETF Outflows and On-Chain Signals
One of the most direct metrics signalling trouble in the market is the flow of capital into (or out of) Bitcoin spot ETFs. According to recent estimates, every US$1 billion of net redemptions from these funds leads to roughly a 3.4% price decline in Bitcoin.
In November, outflows from U.S. spot Bitcoin ETFs had reached about US$3 billion by mid-November, with the IBIT fund alone losing about US$1.78 billion. On-chain data reinforce this picture: older Bitcoin supply (held by long-term addresses) is moving, and large wallets are trimming positions—behaviour consistent with caution rather than accumulation.
For those considering new crypto investments or looking for trading opportunities, this implies two things:
- The momentum driver from institutional capital is weakened for now.
- On-chain activity still offers a signal: if large holders begin re-accumulating, that could mark a transition point. Conversely, continued outflows and inactive accumulation suggest the market remains in a “waiting” phase.
3. Price Implications & Bear-Case Scenario
With outflows mounting and sentiment weak, Bitcoin’s price is under pressure. Citigroup highlights that with fresh flows drying up, Bitcoin is trading closer to their bear scenario than the base case. They cite a key support level at US$82,000 for year-end if inflows remain absent.
Supporting this case, recent news show Bitcoin has indeed fallen into the US$80,000-90,000 range, trading near seven-month lows and having erased much of the 2025 gains.
For someone researching new crypto assets or business opportunities, the takeaway is: the entire ecosystem is in a consolidation or “risk reduction” mode. High-beta assets may be underperforming and require broader market tailwinds (e.g., institutional flows, regulatory clarity, macro easing) to resume strong performance. Considering altcoins or new protocols with less correlation to Bitcoin might be a way to diversify risk.
4. What Could Change the Trend?
Citigroup points to two potential catalysts for a positive turn:
- A rebound in equity markets or improved risk appetite, which historically lifts crypto along with broader risk assets.
- Meaningful regulatory progress in the U.S. around digital-asset legislation, which could reduce institutional hesitance and reopen the capital flow spigot.
Additionally, other narratives are emerging in the crypto space: while Bitcoin and Ethereum funds see outflows, niche funds tracking altcoins such as Solana or XRP may be seeing inflows as capital rotates.
This suggests that opportunistic investors—especially those looking for the next big asset rather than the incumbent Bitcoin—might examine protocols with solid fundamentals, differentiated use-cases, and lower correlation to the ETF inflow/outflow dynamics.
5. Practical Implications for Crypto Investors & Builders
Given the current landscape, what practical steps should crypto-investors, token creators or blockchain project builders consider?
- Assess capital-flow risk: If Bitcoin is under pressure due to institutional outflows, projects that rely purely on “crypto sentiment” may face headwinds. Look instead for those with real-world adoption or utility.
- Explore diversification away from Bitcoin dependency: While Bitcoin remains central, altcoins or blockchain infrastructure projects might offer better upside if they are undervalued and less sensitive to ETF flows.
- Monitor on-chain holders and wallet behaviour: Large wallet movements and accumulation by long-term holders can precede major turns.
- Evaluate regulatory and institutional appetite: For projects (especially ICOs, VASPs, etc.) the regulatory environment matters—since institutional capital may return when frameworks are better defined.
- Be patient on timing: The market may remain in a “waiting phase” until external catalysts (regulation, macro, equity-market rebound) arrive. For those designing token issuances or presales (as you are), timing the market context is important: launching when institutional flows are restarting may yield better traction.
Conclusion
In sum, the current “chill” in the Bitcoin market—driven by heavy ETF outflows, a historically weak second year of the halving cycle, and cautious long-term holders—signals a period of consolidation rather than immediate breakout. Citigroup’s analysis and recent data underscore that without fresh institutional capital or regulatory breakthroughs, Bitcoin may drift toward their US$82,000 bear scenario.
For those seeking new crypto assets, revenue opportunities, or practical blockchain use-cases, this environment suggests two strategic directions: (1) adopt a longer-term horizon and wait for the next institutional wave; or (2) pivot to differentiated protocols or infrastructure plays that can thrive even when capital flows into Bitcoin are subdued.
Either way, the message is clear: we are not in the frothy “post-halving sprint” phase anymore, but rather in a risk-aware pause. Projects, investors and ecosystem builders who recognise this may position themselves more thoughtfully for when the next wave hits.
