October and November, traditionally considered bullish months for Bitcoin (BTC) and altcoins, have not met expectations in 2025. A significant collapse occurred in October following US President Donald Trump’s announcement of tariffs on China. The market downturn on October 11 marked the largest liquidation event in history, and the downward trend persisted into the first week of November.
### Why Did Bitcoin Fall?
Citibank recently evaluated the decline in Bitcoin prices. According to Citi analysts, the primary cause of Bitcoin’s drop was a liquidity shortage, as reported by Coindesk. They also pointed out that Bitcoin’s continued weakness serves as a warning signal for the Nasdaq.
Citi attributed Bitcoin’s vulnerability to liquidity-reducing measures by the US Treasury Department and a decline in bank reserves. Despite this, the bank predicted a potential combined recovery for both Bitcoin and the Nasdaq if liquidity improves by the end of the year.
### Bitcoin’s Decline Is a Warning for Nasdaq
Citibank highlighted that Bitcoin fell due to a liquidity crunch and decoupled from the Nasdaq, breaking its usual close correlation with the Nasdaq 100 index. Historically, Bitcoin’s trading patterns have closely mirrored the Nasdaq’s performance.
Specifically, Nasdaq earnings showed a marked improvement when Bitcoin’s price moved above its 55-day moving average. However, Bitcoin recently dipped below this key technical level, signaling a possible worsening situation for the stock market.
While the Nasdaq remains relatively resilient—supported in part by the ongoing AI sector boom—it now faces a risk of decline linked to Bitcoin’s current weakness. Bitcoin tends to be more sensitive to liquidity fluctuations, which could foreshadow challenges ahead for the broader market.
### Potential for Recovery
Despite current concerns, Citibank emphasizes that there is still upside potential for both Bitcoin and stocks if liquidity conditions improve. The analysts suggest that a year-end “Christmas Rally” is not off the table. Should liquidity bounce back, both Bitcoin and the stock market could experience a synchronized recovery.
*Please note: This article is for informational purposes only and does not constitute investment advice.*
https://bitcoinethereumnews.com/bitcoin/citibank-explains-reason-for-bitcoins-continuing-declines-warns-the-declines-are-a-serious-warning-for-the-giant-stock-exchange/
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