Part 1 was Repo, the Fed injecting overnight liquidity to smooth stress.

Today is Reverse Repo, and this is the one retail NEVER pays attention to…
yet it is the most important liquidity gauge for crypto bull runs.

If Repo is the Fed giving out cash…

Reverse Repo is the Fed sucking cash OUT of the system.

Most of you don’t even know this chart exists.
But every macro top, bottom, melt-up, and crash has been tied to this mechanism.

Understand this, and you level up instantly.

Let’s get into it.

What is Reverse Repo (RRP)?

Reverse Repo is the Fed telling money market funds:

“Give me your cash.
Take Treasuries overnight.”

It is the opposite of repo.

Repo = Fed giving cash.
Reverse Repo = Fed pulling cash.

This is how the Fed drains short-term liquidity without raising interest rates.

And here’s the part 95% never understand:

Reverse Repo is where excess liquidity HIDES during tightening cycles.

When the Fed raises rates, money floods out of risk assets → into money market funds → into Reverse Repo.

It’s basically the Fed saying:

“Park your cash here.
We’ll hold it for you.
Risk-free.”

Every time this RRP balance is high, markets struggle.

Every time it drains, markets pump.

Crypto especially.

Why RRP matters more than TA, sentiment, and influencers

Look at every major macro bottom:

2020 bottom?
Reverse Repo dropped massively → liquidity rushed into markets → Bitcoin exploded → altseason.

2023 bottom?
RRP drained by over $1 trillion → liquidity surged → everything rallied.

2025?
Yes… the exact same setup is happening again.

When RRP drains, that cash goes somewhere.

Banks, funds, traders, institutions — they suddenly have more capital available.

Where does capital go first?

Not into bonds.
Not into savings.
Not into gold.

It goes into the highest beta liquidity absorber: BTC.

And once BTC stabilizes…
it explodes into altcoins.

This is why I always say:

How to read Reverse Repo like a professional

It’s simple:

RRP declining = liquidity entering markets = bullish

RRP rising = liquidity draining from markets = bearish

This is the core.

But here’s the nuance the pros use:

1. The SPEED of the drain matters

A fast drain = explosive rallies.
A slow drain = steady trend.

2. The LEVEL matters

When RRP falls below a threshold → liquidity scarcity disappears.
Risk assets suddenly get oxygen.

3. The TIMING matters

Every major bull run started when RRP hit structural lower lows.

You only need to look at the chart once and you’ll see:

When RRP drains, the entire crypto ecosystem wakes up.

This is the part no retail trader is taught.

And that’s why they never understand why the biggest rallies seem to “come out of nowhere.”

They don’t come out of nowhere.

They come out of liquidity.

Why this matters RIGHT NOW

The key point:

Reverse Repo is nearly exhausted.

That means:

• The Fed has less liquidity to drain.

• The tightening phase is nearing an end.

• The system is shifting into reflation territory.

• Future flows will enter risk assets naturally.

This is why the crypto market refuses to break down despite extreme fear.

It’s why Bitcoin has multiple bullish divergences on every timeframe.

It’s why ETH and SOL are holding multi-year trendlines even during forced liquidations.

You’re watching the final period before the next liquidity wave begins.

People think the market is dead.

But behind the scenes?

Liquidity is preparing a spring-loaded move.

This is why you can’t panic sell.
This is why you need a system.
This is why you need discipline.

You are not trading price.

You are trading liquidity cycles.

The playbook when Reverse Repo drains

Here’s what happens, historically:

1. BTC bottoms first (usually silently, in max fear)

2. BTC rallies while altcoins lag

3. Retail doubts the rally

4. Influencers call for lower

5. BTC breaks out

6. ETH follows

7. Large caps rotate

8. Mid caps explode

9. Small caps go vertical

10. Cycle peak hits

11. Everything nukes

12. RRP refills again

13. Cycle resets

This is the natural rhythm.

It has repeated 4 times.

It will repeat again.

Liquidity drives everything.

If You Want the Full Liquidity System, Stop Trading Blind

If you’re serious about surviving this cycle

If you want:

• my liquidity dashboards

• my cycle models

• my entry/exit systems

• my altseason frameworks

• my macro breakdowns

• the Crypto Exit Manual

• the Altseason Playbook

• the Altseason Survival Manual

Then stop trading alone.

Premium is 117/month

If you don’t understand liquidity,
you’re gambling.

If you do,
you’ll front-run cycles before the world even knows what happened.

Part 3 drops next. Stay sharp.

Victor