Bitcoin and other major cryptocurrencies have experienced significant declines, with the CoinDesk 80 Index dropping 13% since last Thursday. The primary cause is attributed to an impending liquidity drain from the U.S. Treasury General Account (TGA), which is preparing for a significant buildup. Bitcoin has fallen over 8%, currently priced at $113,500, following record highs above $124,000. In parallel, the Nasdaq index has decreased by nearly 1.40%. While much market commentary links these losses to investor caution ahead of Federal Reserve Chair Jerome Powell's upcoming Jackson Hole speech, analysts like David Duong emphasize that the true concern stems from the anticipated TGA liquidity drain of around $400B. The TGA's within the Federal Reserve fluctuates based on government receipts and payments, and a refill of this account amidst fragile market conditions is expected to tighten liquidity further. This scenario poses substantial challenges for Bitcoin enthusiasts looking to sustain upward momentum beyond the year-end.

Source 🔗