BiyaPay Analyst: Liquidity Tightening Warning, US Stocks and Bitcoin Under Pressure at High Levels

ChainCatcher news, according to BiyaPay analysts, the U.S. financial market is sending new signals of tension. Data from the New York Fed shows that the effective federal funds rate has risen by 1 basis point, from 4.08% to 4.09%, still within the Fed's target range of 4%--4.25%, but this is a rare upward movement since the current policy cycle began. Analysts point out that this change reflects a faster-than-expected decline in excess reserves of commercial banks and foreign institutions, indicating that market liquidity is tightening.

As a result, federal funds futures contracts faced selling on Monday, with trading volume approaching 300,000 contracts, and September contract prices significantly dropping. Goldberg, the head of strategy at TD Securities, stated that early signs of pressure have emerged at the front end of interest rates, and the Fed may need to pay closer attention to market dynamics. Meanwhile, U.S. stocks and the crypto market are under pressure at high levels. Powell warned today that stock market valuations are too high, and tightening liquidity further amplifies risks, leading to a collective decline in the three major U.S. stock indices, with Bitcoin also dropping to the $111,000 mark.

Canavan, an analyst at the Oxford Economics Institute, emphasized that although a rate of 4.09% does not trigger alarms, combined with rising repo rates and decreasing reserves, it has sounded the alarm for a tightening monetary environment. BiyaPay analysts believe that in the context of a tightening macro environment and increased volatility in risk assets, investors need to pay more attention to cross-market asset allocation. BiyaPay offers zero-fee spot and contract trading and supports users in investing in U.S. and Hong Kong stocks using USDT, helping investors respond flexibly during periods of tightening liquidity and seize new opportunities in the global market.