Definition
A defensive market state where investors shift toward cash, quality bonds, and lower-volatility assets.
A "risk-off" state (which we label as the Tight state on DollarLiquidity.com) is triggered by deteriorating liquidity conditions, geopolitical shocks, or credit stress. Capital moves to safety: USD cash, short-term Treasuries, and gold. Crypto and high-beta equities typically suffer the most due to leverage and thinner liquidity. On the site, the Tight state is declared when the DLI Score reaches the 80th percentile of its rolling 5-year distribution — signaling historically tight liquidity conditions.