Analysis: Market liquidity is increasingly scarce, and recovery still requires a consolidation period.

On November 5th, CryptoQuant analyst Axel stated that from a momentum perspective, the market will begin to attempt a Rebound. In addition, a large number of short positions have accumulated, which may become the driving force for the Rebound. From a technical perspective, the market has already been Oversold, but history shows that recovery usually requires a period of consolidation. The deterioration of risk appetite is closely related to the increasingly tight market Liquidity. The U.S. government shutdown has led to significant budget cuts, while tax revenue and national debt issuance are still proceeding normally. These factors have collectively led to a significant shrinkage of liquidity in the financial system.

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