HTX DeepThink: The ongoing US government shutdown continues to disrupt data outlook, with the Federal Reserve shifting focus to potential QE in the post-market.

Deep Tide TechFlow News, November 10th, the author of the HTX DeepThink column and HTX Research researcher Chloe (@ChloeTalk1) pointed out that the US government shutdown has lasted over a month. Although Senate leaders from both parties recently indicated they are seeking a “breakaway plan,” lawmakers remain deadlocked over issues such as Medicaid. Both sides only mention “initial progress” and have not reached a real agreement. Due to the shutdown halting official statistics, 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%, indicating a clear cooling of the labor market; meanwhile, the AI sector led the decline in tech stocks, with investors taking profits and high valuations seen as main reasons for adjustment. The strengthening dollar caused gold prices to fall about 1.5% within a week, and market expectations for a rate cut in December dropped from over 90% to about 71%.

On-chain data indicates that large holders reduced their positions at high prices and reaccumulated at lower levels: FinEstel reports that the median number of active addresses increased by 7% in October, with whales significantly distributing Bitcoin near $126,000, but institutional OTC buy orders continued to increase; additionally, inflows of stablecoins reached $2.8 billion, with a 20% decrease in velocity, indicating that a large amount of funds are still waiting on the sidelines for opportunities.

Regarding the Federal Reserve, the October meeting not only included another rate cut but also announced that starting December 1st, the reduction of the balance sheet would cease, ending quantitative tightening (QT), and maturing mortgage-backed securities would be reinvested into short-term government bonds. This means that when the government reopens and the Treasury resumes issuing debt, the central bank will no longer actively reduce its holdings. Some analysts believe this paves the way for restarting quantitative easing (QE) early next year, as weak demand for US Treasuries and high yields may force the Fed to buy back bonds to maintain market liquidity. However, this view remains controversial; currently, the Fed has only confirmed the end of QT. Whether QE is officially restarted depends on the resolution of the government shutdown, economic data recovery, and financial market conditions. Therefore, the market expects that a budget agreement may be reached in late November or early December, after which policy will be shaped by fiscal stimulus and potential QE decisions. The crypto market should closely monitor macro negotiations and the FOMC meeting in mid-December.