Bitcoin price today: Bitcoin (BTC), the world’s largest cryptocurrency, has hit a rough stretch after reaching an all-time high of more than $126,000 in early October, the token slid sharply, dropping back toward the $100,000 level and even dipping briefly into bear-market territory, as per a report.

Bitcoin Price USD Update: Citi Analysts Point to Liquidity Pressures

Many investors initially blamed fewer expected Federal Reserve rate cuts for the pullback. But analysts at Citigroup say the real reason may lie elsewhere, and despite the recent slump, they remain optimistic about Bitcoin’s long-term path, as per The Motley Fool report.

According to Citi strategists led by Dirk Willer, the recent decline appears linked to falling liquidity in the US financial system rather than interest rate expectations, as per the report.

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BTC Price USD: How Falling Bank Reserves Are Dragging Bitcoin Lower

The bank highlights two key factors: bank reserves held at the Federal Reserve and the US Treasury’s General Account (TGA), which acts as the government’s main checking account, as per The Motley Fool report. The TGA and bank reserves generally move in opposite directions, and as the TGA swelled this year, bank reserves dropped, as per the report.

Willer explained that Bitcoin is especially sensitive to liquidity changes, saying, “Traditionally, falling reserves have also impacted equities negatively, but this did not happen prior to this week. But it is plausible that bitcoin is a more sensitive instrument for pure liquidity, especially with equities caught up in the fundamentally driven AI narrative,” as quoted by The Motley Fool.ALSO READ: Synopsys layoffs: Silicon Valley chip-design giant to sack 2,800 jobs as turbulence spreads

Bitcoin Price Movement: How Fed’s Quantitative Tightening Has Affected Crypto

The Federal Reserve’s ongoing quantitative tightening has also pulled money out of the financial system, as per the report. Bank reserves have declined notably since 2022, and Bitcoin’s price has shown a clear correlation with that drop, according to The Motley Fool.

Cryptocurrency Forecast: Why Citi Remains Bullish on Bitcoin Despite Recent Pullback

There are indications that liquidity pressures may start to ease.

The Federal Reserve has signaled it will stop tapering its balance sheet in December, suggesting bank reserves are nearing what it considers “ample” levels, reported The Motley Fool.

After the debt ceiling was raised earlier in 2025, the TGA was temporarily drained but has since been replenished, reaching more than $940 billion as of November 5, and Citi views this level as sufficient, as per the report.

With these shifts, Citi expects liquidity to stabilize and potentially improve, as Willer said, “This would suggest that liquidity conditions should improve going forward, which should support bitcoin, and could also get the NDX (Nasdaq 100) Santa rally back on track,” as quoted by The Motley Fool.

BTC Price USD Outlook: Citi Still Sees Bitcoin Hitting $181,000

Despite the recent downturn, Citi remains bullish. In October, the bank issued a 12-month price target of $181,000 for Bitcoin, driven by its rising status as a store of value and the ongoing “digital gold” narrative, as per the report.

FAQs

Why is the Bitcoin price falling today?
Citi analysts say the drop is mainly due to falling liquidity in the US financial system.

What is Bitcoin’s price prediction according to Citi?
Citi expects Bitcoin to recover and potentially reach $181,000 in the next year.