Bitcoin's recent price decline may be linked to a temporary liquidity squeeze caused by the U.S. Treasury's actions amid budget deadlock and potential government shutdown risks. The Treasury's issuance of large amounts of debt has locked cash into the Treasury General Account (TGA), reducing bank reserves and available market dollars, thereby pressuring risk assets like Bitcoin. Historically, such liquidity tightening by the Treasury often signals an impending market reversal. Bitcoin might be experiencing the final phase of its current adjustment, with government reopening and future interest rate cuts expected, though the timing remains uncertain.
Bitcoin Decline Attributed to Temporary Liquidity Squeeze
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