A decisive risk-on turn across global markets is setting the tone for Bitcoin in the second quarter, as accelerating equity fund inflows and a record weekly exit from cash coincide with evidence that the cryptocurrency continues to trade like a risk asset and remains widely viewed as undervalued by sophisticated investors. Global equity funds drew more than $15 billion in the week through Apr. 1, followed by $23.47 billion, $31.26 billion, and finally $48.72 billion in the week through Apr. 22, while global money-market funds saw a $173.24 billion outflow in the week through Apr. 15—the biggest single-week move out of cash since at least September 2018. Together, these shifts amount to a roughly $292 billion risk-on signal that places Bitcoin squarely in the path of rotating capital.

Market Movement

The four-week run of equity inflows totals about $118 billion, underscoring a broad reopening of risk appetite after a defensive start to the year. In parallel, the $173.24 billion draw from cash highlights investors’ willingness to step away from the sidelines. Against that backdrop, Coinbase and Glassnode’s Q2 Institutional Outlook cites a 0.58 daily return correlation between Bitcoin and the S&P 500 in the fourth quarter of 2025, while the relationship with gold remains negligible. The combination implies that when traditional markets embrace risk, Bitcoin tends to behave accordingly, with equity-like sensitivity rather than a defensive profile.

That alignment matters for price discovery near term. If risk-taking continues to broaden, the same flow-of-funds impulse that lifted equities through April could spill over into digital assets. Conversely, any snapback toward cash would likely apply pressure to Bitcoin as part of a wider de-risking cycle, given the tight co-movement with equities described by Coinbase and Glassnode.

Key Drivers

Survey evidence from Coinbase reinforces the idea that institutional capital sees room for upside. In a poll of 91 global investors—29 institutions and 62 non-institutions—conducted between Mar. 16 and Apr. 7, 75% of institutional respondents characterized Bitcoin as undervalued. Among non-institutional crypto investors, 61% shared that view. Only 7% of institutions and 11% of non-institutions considered the asset overvalued. This distribution signals that, even after a strong multi-quarter advance, large allocators and engaged market participants generally do not view pricing as euphoric.

The interpretation is straightforward: when capital flows toward risk, it tends to seek assets that trade like equities and are still seen as attractively priced. In this regime, Bitcoin fits that description. The correlation with the S&P 500 indicates sensitivity to broader market conditions, and the survey suggests buyers of size remain inclined to add exposure should macro visibility improve.

Investor Reaction

The sentiment snapshot indicates a market not yet primed for excess. With only a small fraction of both institutional and non-institutional respondents labeling Bitcoin as overvalued, positioning appears far from the kind of exuberance that typically precedes sharp reversals. Instead, the balance points to measured conviction: investors recognize near-term macro uncertainties but retain a constructive medium-term stance.

That posture is consistent with on-chain and derivatives signals that describe a market absorbing volatility while gradually rebuilding. Rather than chasing upside with aggressive leverage, market participants appear to be allowing structural holders to re-accumulate and for speculative excess to reset.

On-chain Picture

Supply dynamics echo the sentiment backdrop. Bitcoin supply that moved within the last three months fell 37% during the first quarter, while supply that had not moved for more than a year rose 1%. The pattern suggests that shorter-term holders who bought at higher prices sold into the drawdown, with long-duration holders accumulating. The Puell Multiple declined to 0.7 in the first quarter, implying miner revenue around 30% below its one-year baseline—a zone historically associated with accumulation phases.

Flows across venues also lean constructive. Long-term holder balances increased, exchange balances decreased, and stablecoin supply climbed from $308 billion to $320 billion, indicating that dry powder remained within the crypto ecosystem even as spot prices corrected. In derivatives, options open interest grew 2.4%, and perpetual futures open interest recovered roughly 8.6%, all of which points to a market that worked through deleveraging and then rebuilt exposure at a measured pace.

Broader Impact

If April’s rotation in equities extends into high-yield credit, private credit, and emerging-market risk, Bitcoin stands to benefit from those cross-asset allocations. EPFR described a “marked increase in risk appetite,” noting that high-yield bond funds posted their first inflow since mid-February and private credit flows reached an eight-week high. In such a scenario, institutional conviction in undervaluation combined with cleaner on-chain positioning could facilitate a repricing in Bitcoin without requiring exuberant sentiment.

Under that bull case, a 12% to 20% gain from current levels through the rest of the second quarter would place Bitcoin in the $87,500 to $94,000 range, driven primarily by sustained institutional rotation. A softer U.S. dollar adds an auxiliary tailwind: last week’s intervention-driven move that pushed the dollar index down 0.8% eases financial conditions at the margin, a backdrop that has historically aligned with stronger performance in risk-sensitive assets.

Risks to the Outlook

Coinbase’s formal stance for the second quarter remains neutral. The conditions it would prefer to see before turning more constructive—clear progress toward ending the Middle East conflict, oil prices retreating, and inflation easing—have not yet materialized. Should oil stay elevated and inflation keep the Federal Reserve pinned, Bitcoin’s equity correlation could shift from supportive to restrictive. In that setting, macro desks rotating back into cash, as occurred in early March, would likely weigh on Bitcoin as part of a broader liquidity contraction.

In such a bear case, a pullback of 8% to 15% from current levels—to roughly $66,500 to $72,000—would be consistent with prior macro-driven corrections. On-chain accumulation would still read positively for the longer term, but a renewed macro shock would dominate short-run price action and delay any shift toward a more independent crypto-specific narrative.

Outlook

Bitcoin trades near $78,000, and the path for the remainder of the quarter hinges on whether April’s equity and credit rotation proves durable or fades on the next geopolitical headline. The extent to which Bitcoin’s correlation with equities stays elevated will also matter, especially if crypto-specific flows begin to reassert themselves later in the quarter. For now, the constructive case rests on broader markets taking on more risk while well-informed holders remain under-owned, an alignment that could support prices without tipping into euphoria. The opposing case centers on macro dominance: if risk appetite reverses and cash regains favor, Bitcoin’s role as a liquidity-sensitive asset would likely reassert itself on the downside.