The cryptocurrency market has experienced one of its most bearish phases, as capital outflows continue to dominate, with several assets losing value significantly.
Sellers have wiped out more than $1.37 trillion in market capitalization over the past 79 days, and losses continue to pile up.
The presence of isolated capital, however, has sparked new debates about the potential for a market rebound.
Capital isolated on the market
Global liquidity has increased significantly, reaching $147 trillion according to the latest figures.
The global financial system holds a total amount of money and credit that investors and institutions can deploy in economic activity and financial markets.
Historically, this has been positive for risky assets such as cryptocurrencies like Bitcoin (BTC), as excess liquidity tends to flow into stocks, cryptocurrencies and other speculative assets.
Source: Alpha extract
Ideally, the impact should have been felt across the crypto market; however, investors are currently adopting a more cautious stance.
These investors favor the preservation of capital and turn to assets guaranteeing stability. In this case, gold – which recently hit an all-time high of $4,420 per ounce – remains a key traditional safe haven.
Likewise, capital has shifted to stablecoins, digital assets designed to maintain a 1:1 ratio with fiat currencies such as the US dollar.
The stablecoin market cap reached $308.88 billion, a 2% increase over 30 days.
Is a rebound still possible?
Recent changes to the enhanced supplementary leverage ratio (eSLR) highlight the potential for a market recovery.
In late 2025, federal banking regulators finalized a significant change to eSLR rules to reduce capital constraints on large banks and support Treasury market stability.
Simply put, regulators now require banks to hold less capital than before. For large banks, the 5% requirement and their subsidiaries’ 6% requirement were reduced to approximately 3% (with other adjustments included).
This change will free up hundreds of billions of dollars, encouraging banks to hold more low-risk assets and potentially allocate more to high-risk assets, including Bitcoin.
Even though full implementation is still underway, global liquidity remains the most important factor in providing an outlook.
Recent notes from Alpha Extracts suggest that a positive change in the risk threshold would make this impact more evident.
Now is not the time to accumulate crypto
The Financial Stress Index (FSI), used to measure systemic stress in the global financial market, indicates that this is not the best time to accumulate risky assets.
FSI is currently showing a negative trend, which is historically correlated with the underperformance of assets like Bitcoin.
A return to the positive area of the chart, however, would suggest a safer time to accumulate risk assets such as Bitcoin.
Source: Alphractal
For now, global financial sentiment suggests that there is still isolated capital that could improve crypto market conditions.
This does not negate the current bearish outlook; it only implies that a reversal could happen soon.
Final Thoughts
- Global liquidity has reached a new threshold of $157 trillion; however, this capital remains largely isolated from the crypto market.
- The Financial Stress Index suggests that now is not the best time to buy risky assets such as Bitcoin.
