Bitcoin falls 5.5% as stablecoin supply drops 1.9%

Bitcoin closed at $75,969.06 on Nov. 5, a 5.54% decline from the previous day’s close of $80,428.31, according to Coinbase daily data. This price drop occurred after Federal Reserve data showed bank reserve balances rising by $67.5 billion between Oct. 28 and Nov. 4, while tracked dollar-pegged stablecoin units contracted by 1.91% over the same period.

Reserve Balances Rise Amid Treasury Drawdown

The Federal Reserve’s H.4.1 release reported Nov. 4 reserve balances at $2.96 trillion. Over the preceding week, the Treasury General Account, the government’s account at the Fed, decreased by $79.4 billion to reach $936.2 billion. Treasury payments move balances into depository institutions’ accounts, which increases reserves, while receipts flowing into the Treasury’s account decrease reserves.

Total Federal Reserve assets rose $2.5 billion during the period. Other balance-sheet changes offset part of the effect of the Treasury-account drawdown, contributing to the final reserve change. The data provider DefiLlama tracked dollar-pegged stablecoin circulation falling by more than 5.7 billion units, or 1.91%, between the Oct. 28 and Nov. 4 date labels.

Stablecoin Contraction Led by USDT

Tether’s USDT series accounted for the largest portion of the measured contraction, falling 3.65 billion units. This represented 63.37% of the total decrease in tracked stablecoin units. USD Coin (USDC) circulation declined by 383 million units, contributing 6.64% to the contraction. Other tracked dollar-pegged tokens together contracted a net 1.73 billion units.

The issuer breakdown locates the largest measured change in USDT. Whether issuer redemptions, bridge-accounting adjustments, reclassification, or coverage revisions contributed to this specific decrease remains unquantified. DefiLlama’s selected dates carry midnight UTC labels, while the Federal Reserve reports Wednesday levels for reserve data. The comparison aligns calendar labels but leaves the underlying collection times unsynchronized.

Price Move Follows Reserve Observation

The Nov. 5 Bitcoin close followed the dated reserve observation, placing the price move outside the bank-balance comparison window. Higher bank reserve balances would need to translate into financing and purchases to support a Bitcoin recovery. The measured token contraction adds a crypto-side observation to this test, as neither supply series resolves the cause of the subsequent selloff.

The link from bank reserve balances to Bitcoin buying remains unestablished. A broader token supply could add evidence about crypto-native dollar availability, while proof of Bitcoin demand would still require its own observations. Delayed liquidity effects remain possible, leaving the bank-to-Bitcoin demand channel open for further analysis.