BiyaPay Analyst: Liquidity Tightening Alert, US Stocks and Bitcoin Facing Selling Pressure

On September 24th, according to the analysts of BiyaPay, a new stress signal has been released in the U.S. financial market. Data from the New York Fed shows that on Monday, the effective rate of the U.S. federal funds rose by 1 basis point, from 4.08% to 4.09%, still within the range of 4% - 4.25% set by the Federal Reserve. However, this is a rare upward movement since the current policy cycle. Analysts pointed out that this change reflects a faster-than-expected decline in the excess reserves held by commercial banks and foreign institutions, indicating a tightening of market liquidity. As a result, federal funds futures contracts came under selling pressure on Monday, with a trading volume close to 300,000 contracts, and the prices of the September contract declined significantly. Goldberg, the director of strategy at DWS, stated that early signs of pressure on interest rates have emerged, and the Federal Reserve may need to pay closer attention to market dynamics. At the same time, both the U.S. stock market and the crypto market are under pressure at high levels. Powell has warned today that stock market valuations are high, and further tightening of liquidity exacerbates risks. The three major U.S. stock indexes collectively showed a downward trend, and Bitcoin also dropped to the $111,000 level. Canavan, an analyst at Oxford Economics, emphasized that although a 4.09% interest rate is not yet alarming, the rise in repo rates and the decrease in reserves have already 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 provides zero-fee spot and derivative trading and supports users in investing in U.S. and Hong Kong stocks using USDT, helping investors be flexible in coping with liquidity tightening cycles and seizing new global market opportunities.