LIQUIDITY KNOWLEDGE BASE
Reverse Repo
Cash parked at the Fed through reverse repos.
Definition
The reverse repo facility lets money-market funds and other counterparties park cash at the Federal Reserve overnight.
Liquidity Rule
RRP down can release cash back into markets or bank deposits. RRP up means more cash is parked at the Fed.
Crypto Impact
RRP drawdown can cushion liquidity drains, but it is strongest when reserves and risk appetite also cooperate.
Bullish Setup
RRP falling while TGA is not rebuilding aggressively.
Bearish Setup
RRP rising together with a TGA rebuild.
Common Misunderstanding
RRP falling is not always direct buying power for crypto; it is a cushion, not a guarantee.
Related
RRP down = potential liquidity release; RRP up = cash parked.