The cryptocurrency market is experiencing a synchronized downturn, with analysts attributing the weakness to a significant contraction in U.S. dollar liquidity driven by government treasury operations. Market commentator Ash Crypto provided a macro-focused analysis, highlighting that the U.S. Treasury's efforts to rebuild its Treasury General Account (TGA) have drained approximately $150 billion from the financial system within a single month.
This liquidity withdrawal reduces the capital available for investment in risk assets like cryptocurrencies and technology stocks. Ash Crypto emphasized that this is the primary reason for the current market pressure, stating on social media, "The biggest reason is the liquidity crisis. As of now, a massive amount of liquidity has been drained by the US Treasury to refill its TGA account."
The analysis connects declining Bitcoin (BTC) prices directly to this macro liquidity contraction. The current TGA balance is near $922 billion, a level that has historically acted as a ceiling post-pandemic. A movement lower from this zone could return liquidity to the system and potentially ease pressure on crypto prices.
Concurrently, another popular trader and analyst has suggested that the market may be approaching a bottom. This view is based on the historical pattern where major crypto bottoms have coincided with the resumption of U.S. liquidity expansion. Currently, year-over-year liquidity growth remains negative, indicating money is being drained. The analyst notes that when liquidity falls, "crypto sells off first, then stocks, meaning risk assets stay weak," which aligns with the current environment.
The post explores several metrics suggesting the bottom has not yet been reached, including the Mayer Multiple and long-term holder realized prices. It concludes that a true market reversal is dependent on U.S. liquidity conditions turning positive again.
Looking ahead, seasonal factors like roughly $150 billion in expected tax refunds by March could reintroduce capital into the system and historically support rebounds in risk assets. The short-term direction for Bitcoin and altcoins now appears tightly linked to these macro funding flows rather than project-specific news.
