Investors' risk appetite shifted to stocks as Bitcoin faced difficulties.

The global cryptocurrency and stock markets may face significant challenges after recording a fall in investment flows. The latest data from central banks shows that total assets on balance sheets have sharply decreased over the past 30 days, which is seen as an indicator of global liquidity.

Although it does not reflect the entire liquidity available in the market, this index provides insights into the macroeconomic environment, which can both support and restrict the flow of capital into risky assets such as Bitcoin (BTC).

The meaning of negative global liquidity for risk assets

In the past, Bitcoin has recorded strong growth as global liquidity increased, especially during the bull run from 2020 to 2021. However, when this index turned negative at the end of 2021 and in 2022, Bitcoin struggled to maintain its growth momentum on the charts.

The prolonged fall, with the index once again dropping below 0, may be a sign that risk appetite is weakening. This situation often reflects tighter monetary policies or cuts in financial support.

This may also lead to a fall in demand for Bitcoin and other risky assets such as the S&P 500.

Source: AlphractalThe recent decline is similar to previous occasions when risk assets slowed down or faced difficulties. In fact, the decrease in liquidity indicates that investor sentiment is becoming more cautious. Many investors often reduce their investments in cryptocurrency assets amid market volatility. If the liquidity situation continues, upward price pressure may weaken.

Can Bitcoin regain its correlation with the S&P 500?

In this context, the past two weeks have shown that Bitcoin has recorded lower gains compared to stocks, which is different from its usual trend in the market. The gap between the last two weeks indicates that BTC has stopped growing while stocks continue to fluctuate near their all-time highs.

Bitcoin has had high demand during the turmoil due to tariffs — "Liberation Day/Tariffs" — and has achieved significant gains thereafter. However, it still fell below the rate of 18.

![Source: Alphractal

](https://img.gateio.im/social/moments-da335aaac16bffce35cd68d328f7f4a2)

Unless Bitcoin can reclaim this important threshold, the current weakness may only be temporary.

Can Bitcoin regain its dominant position in the macro context?

Investors seem to be feeling uncertain. The weak correlation between BTC and stocks indicates hesitation in investment decisions. Risk appetite has shifted — at least temporarily — towards traditional markets.

If the current macro tensions ease once again, Bitcoin may recover and begin to lead the market as it did after previous shocks. If the risk appetite continues to tilt toward stocks, BTC may fall deeper and drop below the ratio of 17:1 compared to the S&P 500, especially if its momentum weakens.

The 18 mark continues to play an important role as a resistance level, while 16 is the main support level. Sudden changes in the macroeconomy or significant fluctuations in the stock market could be catalysts for the next move of BTC.

Mr. Teacher