The initial-dip is a transient decrease frequently observed in functional neuroimaging signals, immediately after stimulus onset, believed to originate from a rise in deoxy-hemoglobin (HbR) caused by local neural activity. It has been shown to be more spatially specific than the hemodynamic response, and is believed to represent focal neuronal activity. However, despite being observed in various neuroimaging modalities (such as fMRI, fNIRS, etc), its origins are disputed, and its precise neuronal correlates are unknown. Here we show that the initial-dip is dominated by a decrease in total-hemoglobin (HbT). We also find a biphasic response in deoxy-Hb (HbR), with an early decrease and later rebound. Both the HbT-dip and HbR-rebound were strongly correlated to highly localized spiking activity. However, HbT decreases were always large enough to counter the spiking-induced increase in HbR. We find that the HbT-dip counters spiking induced HbR increases, imposing an upper-limit to HbR concentration in the capillaries. Building on our results, we explore the possibility of active venule dilation (purging) as a possible mechanism for the HbT dip.