Federal Reserve data released on Nov. 5 showed bank reserve balances climbing by $67.5 billion between Oct. 28 and Nov. 4. The increase reflects higher settlement balances at the Fed, but the additional dollar liquidity has not translated into a bullish move for Bitcoin.
Over the same interval, the tracking service DefiLlama reported that dollar‑pegged stablecoins lost more than $5.7 billion in circulation, a 1.91% decline. Tether’s USDT accounted for roughly 63% of the drop (‑$3.65 billion), while USD Coin (USDC) fell $383 million (≈6.6%). The remaining tracked stablecoins contracted by about $1.73 billion.
Coinbase’s daily BTC‑USD candle for Nov. 5 closed at $75,969.06, down 5.54% from the prior day’s settlement of $80,428.31. The price decline occurred after the reserve data were published, positioning the move outside the week‑long balance comparison window.
Bank reserves rose as token supply contracted
The Fed’s H.4.1 report placed total reserve balances at $2.96 trillion on Nov. 4. During the week, the Treasury General Account (TGA) fell $79.4 billion to $936.2 billion, a drawdown that would normally lift reserves as payments move balances into depository institutions.
Reserve growth also incorporated movements elsewhere on the Fed’s balance sheet. Total assets rose $2.5 billion, while other balance‑sheet adjustments offset part of the TGA drawdown, resulting in a net reserve increase of $67.5 billion.
The stablecoin contraction was measured across three principal issuers: USDT fell 3.65 billion units, USDC fell 383 million units, and other tracked dollar‑pegged tokens together lost roughly 1.73 billion units.
Bank reserves rise while tracked dollar‑token units decline, with each series indexed to 100 on October 28OCT 28 = 10098100102Bank reserves102.33+$67.568bnDollar-token units98.09−5.769bn unitsOCT 28, 2026NOV 4, 2026Dated endpoints on an index. Underlying observation times differ.
Indexed bank reserves and dollar‑token units, October 28 to November 4OCT 28 = 10098100102Bank reserves102.33 / +$67.568bnDollar-token units98.09 / −5.769bnOCT 28NOV 4Dated endpoints. Observation times differ.
Inspect the two liquidity signals
Inspect the two liquidity signalsReserve bridgeToken contraction
The Treasury‑account drawdown and asset increase exceeded the final reserve rise because other balance‑sheet changes offset them.
Waterfall from Treasury‑account drawdown and Fed asset changes to reserve growthRESERVE ACCOUNTING BRIDGE / USD BILLIONS+79.384+2.510−14.326*+67.568TGA drawdownFed assetsOther offsetsReserve rise*Derived net offset reconciles the three reported changes.
Reported Treasury drawdown and asset increase, derived other offsets and reported reserve increaseRESERVE BRIDGE / USD BILLIONSTGA drawdown+79.384Fed assets+2.510Other offsets*−14.326Reserve rise+67.568*Derived net offset reconcilesthe three reported changes.
USDT accounts for 63.37% of the measured decline in tracked dollar‑pegged circulating units.
USDT accounts for 63.37 percent of the measured dollar‑pegged token‑unit contraction5.769 BILLION TOKEN‑UNIT DECLINEUSDT63.37%3.655bn unitsUSDC6.64%0.383bn unitsOther, net29.99%1.730bn unitsAll three segments contribute to the measured contraction.
Composition of the token‑unit decline, with USDT, USDC and the net remainder5.769bn TOKEN‑UNIT DECLINEUSDT63.37%3.655 billion unitsUSDC6.64%0.383 billion unitsOther, net29.99%1.730 billion unitsShares of the measured unit contraction.
The two measures moved in opposite directions across these calendar labels.
Calendar labels align, underlying collection times differ. Lines join two endpoints without describing a daily path. The index compares percentage changes across different measures. The token series uses circulating units in the dollar‑pegged category. These observations leave Bitcoin buyer identity and the transmission into demand unmeasured.
The Bitcoin recovery case still needs demand evidence
Reserve balances represent banks’ settlement funds at the Federal Reserve, while stablecoin circulation tracks the outstanding supply of dollar‑pegged tokens. DefiLlama’s data for the week are timestamped at midnight UTC, whereas the Fed’s figures reflect Wednesday levels, so the calendar alignment does not guarantee synchronized observation times.
A liquidity‑driven rally would require a clear link between higher reserves, financing activity, and actual buying pressure on Bitcoin. The simultaneous drop in stablecoin supply removes a source of dollar liquidity that traditionally supports crypto markets, leaving the bank‑to‑Bitcoin demand channel uncertain.
Neither the reserve series nor the stablecoin series alone explains the recent price decline, and delayed liquidity effects remain possible. The divergent movements underscore that additional evidence of Bitcoin demand is still needed to confirm a sustained recovery.