Deep Tide TechFlow news, November 10, HTX DeepThink columnist and HTX Research researcher Chloe (@ChloeTalk1) analyzed that the US government shutdown has lasted for more than a month. Although the Senate leaders from both parties recently stated they are seeking a 'derailment plan', lawmakers remain deadlocked over issues such as Medicaid, and both sides only indicated there has been 'initial progress', but no real agreement has been reached. Due to the shutdown causing official statistics to be paused, the market can only rely on private data to assess the economic situation: the ADP report shows that in October, the private sector added only 42,000 jobs, with wage growth maintaining at 4.5%, and the labor market clearly cooling; meanwhile, the AI sector led the decline in tech stocks, with investors taking profits and high valuations seen as the main reason for the adjustment. The strengthening dollar has caused gold prices to fall by about 1.5% within a week, and market expectations for a rate cut in December have dropped from over 90% to about 71%.
On-chain data indicates that large holders concentrated on reducing their positions at high prices and are re-entering the market at lower levels: The FinEstel report shows a 7% increase in the median number of active addresses in October, with whales significantly distributing Bitcoin around $126,000, but institutional buying in the OTC channels continues to rise; additionally, stablecoin inflows reached $2.8 billion, with a 20% decrease in flow rate, indicating that a large amount of capital is still waiting on the sidelines for opportunities.
Regarding the Federal Reserve, the October meeting not only announced another interest rate cut but also declared the cessation of balance sheet reduction starting December 1, effectively ending quantitative tightening (QT), and will reinvest maturing mortgage-backed securities into short-term government bonds. This means that when the government reopens and the Treasury resumes issuing bonds, the central bank will no longer actively reduce its holdings; some analysts believe this paves the way for a restart of quantitative easing (QE) in early next year, as weak demand for U.S. Treasuries and high yields may force the Federal Reserve to repurchase government bonds to maintain market liquidity. However, this view remains controversial, as the Federal Reserve has only confirmed the end of QT, and whether QE will be officially initiated depends on the resolution of the government shutdown, the recovery of economic data, and the state of financial markets. Therefore, the market expects the government may reach a budget agreement in late November or early December, after which the policy tone will be determined by fiscal stimulus and potential QE, and the crypto market needs to closely monitor the progress of macro negotiations and the FOMC meeting in mid-December.