The copper-to-gold ratio is a key economic indicator. Right now, it’s sliding after China’s recent stimulus announcements. This trend could spell trouble for risk assets like cryptocurrencies.

Bitcoin (BTC) bulls have some reasons to feel optimistic. There’s a chance that pro-crypto Republican candidate Donald Trump could win the upcoming U.S. presidential election. Plus, many expect the Federal Reserve to cut interest rates soon. However, the falling copper-to-gold ratio raises red flags for these riskier investments.

This ratio is calculated by dividing the price of copper per pound by the price of gold per ounce. It has recently hit a new year-to-date low, matching levels from late 2020, according to TradingView. This ratio is often seen as a sign of global economic health and investor risk appetite. It has dropped over 15% this year, marking the largest decline since 2018.

Even more concerning is the fact that the ratio has decreased by 10% since China, the world’s largest importer of commodities, announced a series of stimulus measures in late September. In September, the Federal Reserve also cut interest rates by 50 basis points. Many hoped this would kick off a period of liquidity easing, but it didn’t stabilize the copper-to-gold ratio.

This ongoing decline might indicate a tougher economic picture that risk assets are overlooking. Copper, as an industrial metal, usually performs well when the economy is expanding. It has historically reacted positively to China’s stimulus measures. Gold, on the other hand, is viewed as a safe haven. Therefore, a falling copper-to-gold ratio is generally seen as a risk-off signal.

As of now, Bitcoin is up 60% for the year, trading around $67,800, according to CoinDesk. Most of these gains came in the first quarter. Since then, bulls have struggled to keep prices above $70,000. Concerns over supply, especially related to the defunct exchange Mt. Gox, have contributed to this struggle.

Interestingly, the decline in the copper-to-gold ratio started in May, providing risk-off signals. This downward trend picked up speed in July, leading to a brief period of risk aversion in early August. During that time, Bitcoin’s price dropped from $65,000 to $50,000.

Additionally, data from TradingView shows that Bitcoin’s best years—like 2013, 2016-2017, and 2020-2021—coincided with an upward trend in the copper-to-gold ratio. If history repeats itself, the current drop in this ratio raises doubts about bullish expectations for Bitcoin, including the hope for a rally to $100,000 by year-end.