Take a look at the Treasury General Account below With the government shut down, the TGA is not getting spent so it’s building as receipts are received and debt issued The latest opening balance stands at $965bn - a build of circa 150bn in October - that’s cash coming out of the market On top of that into month end, the RRP is building as banks window dress balance sheets The RRP is up circa 20bn so far this week That’s all liquidity being taken out of this market Add to that the fact that bank reserves have fallen into the lower range of “ample” This is creating some tightness in bank funding markets witnessed by elevated SOFR spreads and rising usage of the Fed’s Standing Repo Facility (SRF) Yesterday, eligible firms took just over $10bn on loans from the SRF, a record since its introduction in 2021 Whilst this is not extreme stress, its tightening This is why Bitcoin, given its hyper sensitivity to liquidity, is failing to break out of this choppy range So what changes? Obviously, after month end, the RRP will be drawn back down and return that circa 20bn to the market Bank reserves will be more freely lent out too Some tightness will remain until the end of QT on first Dec but once that ends, we start to get Fed balance sheet expansion once more after a few years of contraction The government shutdown ending (likely mid Nov) will also see the TGA drawn down unleashing a flood of cash back into the market which will see bank reserve levels rise alleviating the moderate funding stress So the liquidity picture is set to change quite significantly over the coming weeks This week, into month end, is probably as tight as US based liquidity gets (until at least year end) TLDR; liquidity headwinds ease after this week alleviating the pressure on Bitcoin Towards the end of Nov and into the end of QT on 1st Dec, liquidity becomes a tailwind and we really pump These are the levels you should be buying Bitcoin to position for the next leg higher NFA of course 😉