Stablecoin contraction forces Bitcoin drop despite Fed reserve gains

Bank reserve balances rose $67.5 billion between Oct. 28 and Nov. 4, according to the Federal Reserve’s Nov. 5 release, but the more abundant dollar liquidity is not automatically bullish for Bitcoin.Over the same period, data provider DefiLlama tracked dollar-pegged stablecoin circulation falling by more than 5.7 billion units, or 1.91%.The split leaves an incomplete picture for a Bitcoin recovery. Higher bank reserve balances would still need to translate into financing and purchases, so the measured token contraction adds a crypto-side observation to that test.A Nov. 5 Treasury-cash analysis considered a possible December funding window using projected cash paths and the older Oct. 28 reserve baseline. The new release updates that starting point with a rebound in realized reserves.Coinbase's completed Nov. 5 daily BTC-USD candle closed at $75,969.06, down 5.54% from $80,428.31 on Nov. 4. That close-to-close fall followed the dated reserve observation, putting the price move outside the bank-balance comparison window.Bank reserves rose as token supply contractedThe Fed’s H.4.1 release puts Nov. 4 reserve balances at $2.96 trillion. Over the preceding week, the Treasury General Ac...