BTC Liquidity State Machine Daily | 2026-10-25

English overview only. The full public research report is in Chinese, not translated here. Full Chinese report: https://argusx.fun/research/liquidity/2026-10-25/daily/

The model moves from S1 TRANSITION to S0 TIGHT, moderate conviction (63%). FLOW and MACRO dominate. The October 21 weekly Fed H.4.1 reserve decline and rising Treasury cash balance are accompanied by a weak two-session BTC ETF flow sequence (October 23 remains preliminary pending HODL) and still-shrinking stablecoin supply. The feedback layer is fragile but lacks evidence of continuously accelerating forced deleveraging, so S3 is not confirmed. Risk-free rates edged higher on October 23, while the latest confirmed SOFR-IORB spread does not show an overnight cash squeeze. Thesis invalidation requires a sustained improvement in spot flows and liquidity conditions, or an independently confirmed forced-selling cascade.

State dashboard

Q: TIGHTENING; P: NEUTRAL with tightening bias; g: TIGHTENING; F: FRAGILE-NEGATIVE. Feedback Gain: DECAYING. Policy threshold: APPROACHING (not reached).

Monitoring observations

• Week ended 2026-10-21: bank reserves 2.962607 trillion USD.
• Week ended 2026-10-21: Treasury General Account 0.952002 trillion USD.
• 2026-10-23 U.S. 2-year nominal Treasury yield 4.69%.
• 2026-10-23 U.S. 10-year nominal Treasury yield 5.00%.
• 2026-10-23 U.S. 30-year nominal Treasury yield 5.33%.
• 2026-10-23 U.S. 10-year TIPS real yield 2.66%.
• 2026-10-23 provisional U.S. spot BTC ETF flow -1.379 hundred million USD (HODL pending).
• As of 2026-10-24, aggregate stablecoin market cap 3005.48 hundred million USD.
• 2026-10-22 SOFR minus IORB equals 0bp.

Sources and all ten A–J sections, including evidence, alternative explanations, invalidation criteria, and monitoring priorities, are available in the complete Chinese public report at the link above.