Bitcoin’s (BTC) recent performance may be due less to cryptocurrency market weakness and more to its position at the head of the risk curve. Asset management firm Bitwise said BTC often acts like a “canary in the macro mine,” reacting to changes in liquidity and financial conditions ahead of classic markets. With stocks currently showing similar signs of stress, the company views Bitcoin’s move as part of a broader risk correction.
Global liquidity and interest rates remain in focus: Bitwise
Bit he said that Bitcoin and Ether hit cycle lows of $58,000 and $1,507 respectively, while other global risk assets faced mounting pressure. The Nasdaq stock market posted its sharpest daily decline of 5% in months, and South Korea’s benchmark KOSPI (Korea Composite Stock Price Index) stock index caused a short-lived halt to trading after a piercing sell-off led by semiconductor stocks.
This change occurred after stronger-than-expected data from the US labor market, which reduced expectations for short-term easing by the Federal Reserve. Higher interest rate expectations kept the 10-year US Treasury yield higher for longer and weighed on growth-sensitive assets. The yield on U.S. 10-year bonds remained near 4.53% on Tuesday after hitting 4.68% last month, the highest level in a year.
Bitwise pointed to a recurring pattern of Bitcoin weakening months ahead of stocks. Unlike classic markets, BTC trades continuously and responds quickly to changes in liquidity conditions.
BTC Price, NASDAQ and Global M2 Liquidity. Source: Cointelegraph/TradingView
A chart comparing the liquidity of Bitcoin, Nasdaq and Global M2 highlights the discrepancy. Global M2 has climbed to around $122.6 trillion, showing steady growth over the past year, while Bitcoin has retreated sharply from its highs of $126,000.
If Bitcoin behaves like a macro canary, its correction could tell a different story than a basic risk-cutting move. BTC has already undergone a significant sell-off as global liquidity continues to augment. This leaves open the possibility that Bitcoin will be further along in the adjustment process than equities, especially if liquidity conditions improve later in the cycle.
Related: Bitcoin Price Falls Toward Local Lows at $62,000 dollars as bear market history keeps repeating itself
Stablecoin reserves signal desiccated powder
Onchain data offers a different perspective on cryptocurrency market liquidity. Independent market analyst Maartunn highlighted that the Relative Strength Index (RSI) Stablecoin Supply Ratio (SSR) has dropped to an oversold reading of 13.
Stablecoin Supply Ratio (SSR) RSI. Source: CryptoQuant
The SSR measures Bitcoin’s market capitalization relative to the market value of major stablecoins such as Tether’s USDt (USDT) and Circle’s USD Coin (USDC). Lower readings indicate larger stablecoin balances compared to Bitcoin’s valuation, indicating significant purchasing power remaining on the sidelines.
Historically, similar SSR RSI readings have occurred near accumulation zones, followed by periods of stronger prices as liquidity returns to the market.
All stablecoin exchange reserves. Source: CryptoQuant
Stock reserves data also indicate a significant pool of liquidity. Total reserves of major stablecoins on exchanges are currently close to $72 billion, of which $57.7 billion in USDT (USDT) and $12 billion in USDC. This total is down from a behind schedule 2025 peak of more than $80 billion, although balances remain elevated by historical standards. This leaves a significant portion of capital placed on exchanges as Bitcoin is trading near the bottom of its recent range at $62,000.
Related: Bitcoin Bottom? These four charts indicate a drop in the BTC price to 50,000. dollars
