Bitcoin may act as a ‘canary in the coal mine’ as risk-off pressure spreads: Bitwise
Bitcoin’s recent drop may reflect its role as an early warning signal for tighter financial conditions rather than simple crypto weakness. Bitcoin and Ether hit cycle lows as the Nasdaq and South Korea’s KOSPI also sold off, following strong U.S. labor data that pushed expectations toward higher-for-longer rates and kept Treasury yields elevated. Bitwise argues Bitcoin often reacts before equities because it trades continuously and is highly sensitive to liquidity shifts. At the same time, global M2 liquidity keeps rising, suggesting Bitcoin may already be further into its repricing than stocks. Onchain data also shows ample potential buying power: the stablecoin supply ratio is oversold, and exchange stablecoin reserves remain high, indicating sidelined capital that could support a rebound if conditions improve.
