Source: Cointelegraph Original: "{title}"
Since the U.S. debt ceiling reached $36 trillion on January 2, 2025, the U.S. Treasury has injected $500 billion into the financial markets by drawing liquidity from the Treasury General Account (TGA) to fund government operations.
Macro-financial analyst Tomas stated that this surge in liquidity has increased the Federal Reserve's net liquidity to $6.3 trillion. Although risk assets have seen little growth so far, this could support Bitcoin's price in the future.
Expected liquidity flow of the Treasury's general account. Source: X.com
The Treasury General Account (TGA) represents the government's checking account at the Federal Reserve, storing funds for daily operations such as paying bills or collecting taxes. A reduction in TGA capital means that this balance has been injected into the broader economy, thereby increasing cash liquidity in the market.
Tomas explained that the withdrawal of TGA funds began on February 12, after the "extraordinary measures" were exhausted following the debt ceiling being reached. The TGA balance decreased from $842 billion to about $342 billion, releasing liquidity into the system, with expectations that by the end of April, target liquidity will rise to $600 billion.
The analyst added that the current tax season will temporarily consume liquidity, but withdrawals are expected to resume in May. If debt ceiling negotiations extend into August, net liquidity could reach a multi-year high of $66 billion, potentially providing a bullish impetus for Bitcoin.
Correlation of Bitcoin with global liquidity. Source: Lynalden.com
According to financial analyst Lyn Alden's research, Bitcoin has an 83% probability of being aligned with global liquidity over the past 12-month cycle. This study, referred to as the "Bitcoin Global Liquidity Barometer," compared Bitcoin with other major asset classes such as SPX, gold, and VT, showing that Bitcoin ranks high in the correlation index with global liquidity.
The TGA fund withdrawals in 2022 and 2023 have driven speculative assets like Bitcoin. Therefore, if market conditions remain stable, the $600 billion liquidity injection, along with additional billions in funding from the second to third quarter, could enhance Bitcoin's value.
Analyst predicts Bitcoin targeting $137,000
Anonymous crypto trader Titan of Crypto shared a bullish outlook for Bitcoin, predicting that it could soar to a new all-time high of $137,000 between July and August 2025. In a recent post on X (formerly Twitter), the analyst noted that a bullish flag pattern on the daily chart for Bitcoin may indicate an impending price breakout in a positive direction.
Titan of Crypto's bullish flag for Bitcoin. Source: X.com
However, before betting on a long-term bullish trend for Bitcoin, BTC must break above and maintain above the 200-day exponential moving average (EMA). As shown in the chart, Bitcoin faces resistance from three key EMAs, namely the 50-day, 100-day, and 200-day indicators.
If Bitcoin can collectively break out and re-establish itself above each moving average on the longer time frame charts, this could further solidify the bullish argument, making it possible for the cryptocurrency to retest its six-figure target price.
Bitcoin 1-day chart analysis. Source: Cointelegraph/TradingView
Related: Bitcoin reverses downtrend, rebounds to $85,800—Are BTC bulls really back?
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
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