Black holes in asymptotically flat space-times have negative specific heat-they get hotter as they loose energy. A clear statistical mechanical understanding of this has remained a challenge. In this work, we address this issue using fluid-gravity correspondence which aims to associate fluid degrees of freedom to the horizon. Using linear response theory and the teleological nature of event horizon, we show explicitly that the fluctuations of the horizonfluid lead to negative specific heat for a Schwarzschild black Hole. We also point out how the specific heat can be positive for Kerr-Newman or AdS black holes. Our approach constitutes an important advance as it allows us to apply the canonical ensemble approach to study thermodynamics of asymptotically flat black hole space-times.