Bitcoin (BTC)’s recent performance may be less about crypto market weakness and more about its position at the front of the risk curve. Asset management firm Bitwise said BTC often acts as a “canary in the macro coal mine,” responding to changes in liquidity and financial conditions before traditional markets. With equities now showing similar signs of stress, the company sees Bitcoin’s move as part of a broader risk-off adjustment.
Global liquidity and interest rates in focus: Bitwise
bitwise Said Bitcoin and Ether hit cyclical lows of $58,000 and $1,507, respectively, as other global risk assets faced mounting pressure. The Nasdaq posted its sharpest daily decline of 5% in months, and South Korea’s KOSPI (Korea Composite Stock Price Index), its benchmark stock index, hit a temporary trading halt after a heavy selloff led by semiconductor stocks.
The change came after stronger-than-expected US labor market data, which dampened expectations for near-term Federal Reserve easing. Expectations of higher interest rates for a longer period of time kept 10-year US Treasury yields high and put pressure on growth-sensitive assets. US 10-year yields stood near 4.53% on Tuesday, their highest in a year, after touching 4.68% last month.
Bitwise pointed to a recurring pattern in which Bitcoin weakens a few months ahead of equities. Unlike traditional markets, BTC trades continuously and reacts immediately to changes in liquidity conditions.
BTC price, NASDAQ, and global M2 liquidity. Source: Cointelegraph/TradingView
A chart comparing Bitcoin, Nasdaq, and Global M2 liquidity highlights the divergence. Global M2 has grown rapidly over the past year to nearly $122.6 trillion, while Bitcoin has retreated sharply from its high of $126,000.
If Bitcoin is acting as a macro canary, its correction may tell a different story than a simple risk-off move. BTC has already undergone a significant revaluation while global liquidity continues to expand. This opens the possibility that Bitcoin is further along in the adjustment process than equities, especially if liquidity conditions improve later in the cycle.
Related: Bitcoin price falls to local low of $62K as bear market repeats history
Stablecoin reserves indicate dry powder
Onchain data is offering a different perspective on crypto market liquidity. independent market analyst martunn Thrown light on The stablecoin supply ratio (SSR) relative strength index (RSI) has fallen to an oversold reading of 13.
Stable Money Supply Ratio (SSR) RSI. Source: CryptoQuant
The SSR measures Bitcoin’s market capitalization relative to the market cap of major stablecoins like Tether’s USDT (USDT) and Circle’s USD Coin (USDC). Low readings indicate large stablecoin balances relative to Bitcoin’s valuation, pointing to substantial purchasing power sitting on the sidelines.
Historically, similar SSR RSI readings appear near accumulation zones and periods of strong price performance after liquidity returns to the market.
All stablecoin exchange stores. Source: CryptoQuant
Exchange reserve data also points to a larger liquidity pool. The combined reserves of major stablecoins on exchanges are currently near $72 billion, including $57.7 billion in USDT (USDT) and $12 billion in USDC. The total is down from a peak of more than $80 billion at the end of 2025, though the balance remains high by historical standards. This leads to a massive accumulation of capital on exchanges as Bitcoin trades near the lower end of its recent range at $62,000.
Related: Bitcoin Down? These four charts indicate BTC price falling to $50K
