Bitcoin could be on the verge of a major rally, potentially reaching $137,000 by the third quarter of 2025, according to analysts tracking U.S. Treasury liquidity trends. A significant factor behind this bullish outlook is the ongoing drawdown of the Treasury General Account (TGA), which has released approximately $500 billion into the financial system since February 2024.
Understanding the Treasury General Account and Its Impact
The TGA functions as the federal government’s primary checking account at the Federal Reserve. Since February 12, 2024, the balance has fallen from $842 billion to around $342 billion, freeing up funds in the broader financial ecosystem. This trend follows fiscal maneuvers related to the recent debt ceiling negotiations, with the national debt crossing $36 trillion earlier this year.
As liquidity increases in the financial system, it often fuels demand for risk assets. Bitcoin, known for its sensitivity to liquidity flows, could particularly benefit. Historically, Bitcoin maintains an 83% correlation with global liquidity metrics over a 12-month period, enhancing its attractiveness during high-liquidity periods.
Historical Precedents and Price Projections
Past drawdowns in the TGA—most notably in 2022 and 2023—were accompanied by surges in asset prices, including Bitcoin. Analysts believe similar conditions could emerge again if another $600 billion in liquidity is added through continued TGA reductions. If so, these injections could drive Bitcoin’s price as high as $137,000 by Q3 2025.
Some additional supportive factors include:
- Correlation between Bitcoin and net liquidity levels
- Growing institutional interest in digital assets
- Potential monetary easing amid macroeconomic headwinds
Key Technical and Market Risks
Despite the favorable conditions, there are hurdles to overcome. Bitcoin is currently grappling with resistance at major moving averages, including the 200-day exponential moving average. A breakout above this level is seen as pivotal to confirming the bullish scenario. Meanwhile, temporary liquidity drains—such as those during tax season—could apply short-term pressure on prices.
Looking Ahead: Policy and Market Implications
Bitcoin’s performance remains tightly interwoven with both monetary policy direction and U.S. fiscal strategy. Any future changes to debt ceiling timelines or fiscal operations could either strengthen or derail the prevailing outlook. Investors are urged to monitor these macroeconomic determinants closely as they consider exposure to crypto markets.
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