Crypto investors are shifting to a defensive stance as expectations for rate cuts this year have dropped to zero, influenced by the ongoing war and rising inflation risks. Historically, cryptocurrencies have thrived in low-rate environments, but with U.S. inflation projected above 5% over the next year, the outlook for fresh capital inflows is weakening. U.S. Treasury yields have reached 4.37%, the highest since July 2025, raising concerns about a potential financial crisis. Despite these macroeconomic pressures, the total crypto market cap remains stable at around $2.4 trillion, with no significant outflows. However, the stablecoin market cap has increased by 2.22% this month, reaching a new high of $316 billion, indicating that liquidity is building on the sidelines. USDT netflows have seen a significant outflow of over $500 million, suggesting investors are moving capital into safer positions. This cautious positioning reflects a focus on capital preservation amid a bearish macro environment, with stablecoins becoming a preferred parking zone for capital until risk appetite returns.