#加密市场反弹 The Federal Reserve is panicking, is the balance sheet reduction coming to an end? The Federal Reserve's bank reserves have dropped to the warning line of 12.2%. Good news has arrived; the Federal Reserve may end the balance sheet reduction process early, and the tough days are finally coming to an end. Global liquidity will once again be abundant, and the strong dollar may reach a turning point, which is also a boost for digital currency assets.

A very important data point was just released: the bank reserves on the Federal Reserve's balance sheet have officially fallen below $3 trillion. As of the week ending January 1 of this year, the bank reserves in the U.S. reached $2.89 trillion, dropping to the lowest level since 2020. When this bank reserve is divided by the total assets of U.S. commercial banks, this ratio has already dropped to the warning line of 12.2%.

If it officially falls below 12%, the Federal Reserve will have to take action. Why has the bank reserves suddenly decreased so much? This is because at the end of the year, the Federal Reserve needs to audit and supervise the asset conditions of various banks. Banks will rush to clear many complex financial instruments from their books, resulting in banks selling assets in the financial market to convert them into currency and put them back into the Federal Reserve's reverse repo account. This is equivalent to banks also starting to reduce their balance sheets. The Federal Reserve is currently reducing its balance sheet by about $50 billion each month. At this time, if banks are also reducing their balance sheets along with the Federal Reserve, then liquidity in the market will certainly decrease significantly. $SOL