MacroBeginner#Sentiment#Market Cycles
Risk-On / Risk-Off
R
Definition
Informal market shorthand for periods when investors appear more willing to hold risky assets (risk-on) or more focused on reducing risk (risk-off). It is a description, not a standardized regime or a forecast.
Source reviewed
- BIS Annual Report 2017: Political shocks reorient markets opens in a new tab
Supports: BIS describes periods in which investors differentiated across sectors and countries instead of making broad risk-on or risk-off shifts, supporting cautious use of the labels.
- Federal Reserve: H.10 Foreign Exchange Rates opens in a new tab
Supports: The Federal Reserve documents the scope and construction of dollar exchange-rate indexes, showing that an indicator must be read with its methodology and coverage.
Concept Diagram
Key Takeaways
1
Risk-on and risk-off are informal descriptions, not standardized market states.
2
Different markets can move differently in the same period; country, sector, currency, and horizon matter.
3
Record the source, date, construction, and contradicting evidence for every indicator used.
4
The labels cannot forecast Bitcoin, identify a universal safe haven, or justify a trade.
Practical Example
A weekly review finds wider credit spreads and lower equity prices, while the dollar index is unchanged. It describes the observations rather than declaring a universal risk-off regime, checks country and sector differences, and leaves its asset allocation and leverage limits unchanged unless its independent risk process calls for a change.
Finished learning?
Related Terms
Strategy
DXY (US Dollar Index)The ICE U.S. Dollar Index: a fixed-weight, geometrically averaged measure of the US dollar against six currencies. It is one currency-index methodology, not a global-liquidity measure or a Bitcoin price signal.
Strategy
BTC DominanceBitcoin's stated share of an aggregation provider's total crypto market-cap denominator. It is a derived ratio, not a direct measure of capital flows, relative safety, an altcoin season, or future returns.
Macro
M2 Money SupplyA measure of the money supply that includes cash, checking deposits, and easily convertible 'near money' like savings and money market funds.
Strategy
Bear MarketA period of broad price declines and pessimistic sentiment. A 20% move over at least two months is a common stock-index convention, not a universal rule for crypto, a single asset, or every time window.
Related Deep Dives
Master the hub of Macro
Explore all our strategic guides about Macro to take your operations to the next level.
View all articles