Wall Street’s $292 billion risk-on rotation just created a new bullish setup for Bitcoin

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Global equity funds attracted over $15 billion in the week ending April 1, followed by $23.47 billion, $31.26 billion, and finally $48.72 billion in the week ending April 22.

Simultaneously, global money-market funds experienced a $173.24 billion outflow in the week ending April 15, marking the largest single-week exit from cash since at least September 2018.

These numbers collectively signal a risk-on sentiment of approximately $292 billion, combining $118 billion of global equity fund inflows over four weeks with a separate $173 billion weekly exit from cash.

According to Coinbase and Glassnode’s Q2 Institutional Outlook, Bitcoin’s daily return correlation with the S&P 500 stood at 0.58 in the fourth quarter of 2025, while its correlation with gold remained negligible.

When capital flows towards risk, it tends to gravitate towards the asset class that Bitcoin currently mirrors.

A more detailed analysis comes from Coinbase’s survey of 91 global investors, including 29 institutions and 62 non-institutions, conducted between March 16 and April 7.

Of the institutional respondents, 75% see Bitcoin as undervalued, while 61% of non-institutional crypto investors share the same sentiment. Only 7% of institutions and 11% of non-institutions perceive BTC as overvalued.

These figures depict a market where significant buyers still see potential for growth. As capital flows towards risk, it aligns with an asset that sophisticated holders still consider to be undervalued, within a market that has not yet shifted towards euphoria.

The on-chain perspective

During the first quarter, BTC supply that had not moved in the last three months decreased by 37%, while supply stagnant for over a year increased by 1%.

Speculative holders who purchased at higher prices exited during the drawdown, while long-term holders accumulated more.

The Puell Multiple dropped to 0.7 in the first quarter, indicating that miner revenue operated around 30% below its one-year baseline, a range historically associated with accumulation phases.

Long-term holder balances rose, exchange balances fell, and stablecoin supply grew from $308 billion to $320 billion, indicating that liquidity remained within the crypto market during the downturn.

Options open interest increased by 2.4%, and perpetual futures open interest recovered by approximately 8.6%, illustrating a market that absorbed its deleveraging process and rebuilt steadily.

The bullish scenario

If the equity rotation seen in April extends to high-yield credit, private credit, and emerging-market risk, Bitcoin stands to benefit from this influx of capital.

EPFR noted a “marked increase in risk appetite,” with high-yield bond funds recording their first inflow since mid-February and private credit flows hitting an eight-week high.

In this scenario, institutional confidence in undervaluation and favorable on-chain metrics pave the way for a potential price repricing with significant upward potential. Survey respondents from Coinbase exhibit a cautious stance, positioning them to benefit from an improving macroeconomic backdrop as they remain underexposed.

A potential 12% to 20% increase from current levels throughout the second quarter could push BTC into the $87,500 to $94,000 range, primarily driven by ongoing institutional rotation.

The weakening of the dollar, evident in last week’s intervention-induced movement that drove the dollar index down by 0.8%, provides an additional supportive factor.

Bitcoin has historically closely followed global dollar liquidity trends, and a softer financial environment favors risk assets to some extent.

The bearish scenario

Coinbase’s neutral stance for the second quarter suggests that certain conditions need to materialize before a more positive outlook can be warranted, such as a definitive resolution to the Middle East conflict, a decline in oil prices, and easing inflation.

If oil prices remain elevated and the Fed remains constrained by persistent inflation, Bitcoin’s correlation with equities could shift from a tailwind to a headwind. In the event that macro desks revert to cash positions, as seen in early March, BTC could be viewed as a liquidity beta during downward movements.

In such a scenario, macroeconomic factors could overshadow the belief in institutional undervaluation. Survey respondents, perceiving BTC as undervalued, might remain on the sidelines due to geopolitical uncertainties influencing their investment decisions.

The on-chain accumulation data may provide a positive long-term outlook, but a renewed macroeconomic shock could override these readings in the short term.

A potential decline of 8% to 15% from current levels, landing BTC in the $66,500 to $72,000 range, aligns with the magnitude of previous macro-driven corrections in BTC and would only require a return to the defensive flow pattern observed in March.

The remainder of the quarter hinges on the sustainability of April’s equity and credit rotations and whether Bitcoin’s correlation with equities remains strong or veers towards a more independent trajectory as crypto-specific flows begin to influence price movements.

The optimistic outlook relies on broader markets embracing more risk once again, while Bitcoin’s most knowledgeable holders maintain a lower exposure level for a potential smooth recovery.