• Gold drops sharply after a series of ATH.
• Crypto crashes quickly due to leverage liquidation.
• Stocks are all in the red.
→ The familiar question arises: 'Where is the money flowing to?'
• In many cases, the answer is not another asset, but to exit risk.
• Instances of all assets dropping together are usually not rotations.
→ This is de-risking: closing positions, reducing exposure, lowering leverage.
• When uncertainty increases (policy, interest rates, geopolitics), the market does not need to look for a 'new story' immediately.
→ The first thing is to narrow down current risks.
• Therefore we see:
→ gold is also being sold
→ crypto is also being liquidated
→ equity is also in the red but there is no immediate replacement asset.
• Cash flow during this phase often lies in:
→ cash
→ short-term T-bills
→ or simply not back in the market yet.
• The important thing is not where the money is going today, but when the market is ready to take risks again — and who the first chosen asset is.
In summary: When everything is declining, it is not the market choosing the wrong asset. It is that the market is not yet ready to choose.
According to you, what signs will indicate that cash flow returns to risk assets?
