A China indicator that greases risk-taking in stocks and bitcoin is flashing red

China’s credit impulse, a measure of new lending and financing that has historically correlated with risk-taking in equities and bitcoin, is turning sharply lower. Analysts view the decline as a signal of waning domestic liquidity and investor risk appetite in China, which tends to reduce flows into risk assets. For bitcoin, the key implication is increased downside pressure and greater sensitivity to macro shocks while Chinese credit conditions remain constrained, removing a prior source of demand.