Bitcoin (BTC’s) recent performance could be more due to its place at the forefront of the crypto risk curve than it is about the weakness in the market. Bitwise Asset Management said BTC acts often as a ‘risk curve. “canary in the macro coal mine,” Traditional markets are not able to respond quickly enough to the changes in market liquidity. Bitcoin has been able to move in line with a risk-off trend that is being seen by equities.
The global liquidity and interest rate focus remains: Bitwise
Bitwise said Bitcoin and Ether both reached new cycle lows at $58,000 each, and $1.507 respectively. This was as global risk assets were under pressure. Nasdaq experienced its biggest daily drop of 5% since months. South Korea’s KOSPI, its benchmark index, was temporarily halted after an intense sell-off in semiconductor stocks.
The shift followed stronger-than-expected US labor market data, which reduced expectations for near-term Federal Reserve easing. Expectations of longer-term interest rates pushed up the US 10-year Treasury yields and affected growth-sensitive assets. The US 10-year Treasury yield was at 4.53% Tuesday. It had reached 4.68% the previous month.
Bitwise has identified a pattern where Bitcoin weakens several months prior to the equities market. BTC is a market that trades constantly and responds to liquidity changes quickly.
BTC, Global M2 liquiditiy, and NASDAQ. Source: Cointelegraph/TradingView
The chart below compares Bitcoin with the Nasdaq index and Global M2 liquid. Global M2 is now at approximately $122.6 trillion and has been steadily increasing over the last year. Bitcoin, however, has fallen sharply since its high of $126,000.
Bitcoin may act as a canary for the macro-economy, and its recent corrections could tell a very different story from a straightforward risk off move. BTC is already undergoing a major repricing, while global liquidity expands. It is possible that Bitcoin may be further along than equity in its adjustment, especially if liquidity improves later in the cycle.
Related: Bitcoin price slips toward $62K local lows as bear-market history keeps repeating
Dry powder Stablecoin Reserves
Onchain data offers an alternative perspective to the market. Independent market analyst Maartunn highlighted The relative strength index of the Stablecoin Supply Ratio has fallen to a reading that is oversold at 13.
Source: CryptoQuant. Source: CryptoQuant
SSR compares the value of Bitcoin to other major stablecoins, such as USDt from Tether and Circle USD Coin. Low readings show larger stablecoins balances when compared to Bitcoin valuation. This indicates a large amount of buying power on the sidelines.
In the past similar SSR RSI levels have been seen near zones of accumulation, and these readings were then followed by stronger periods in price movement once liquidity had returned to market.
Source: CryptoQuant. All Stablecoins Exchange Reserves. CryptoQuant
Data on the exchange reserve pool also shows a substantial liquidity pool. Reserves of the major stablecoins at exchanges total $72 Billion, with USDT and USDC leading. While the total is down from its peak of $80bn in late 2025, it remains high by historical standard. Bitcoin, which is currently trading near the bottom of its current range of $62,000, has a large amount of capital in exchanges.
Related: Bitcoin bottom? These four charts hint at BTC price dropping to $50K
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Source: cointelegraph.com
