"Liquidity recovery after U.S. government resumes…likely reflected in crypto markets about 12 days later"

Analysts say that Treasury General Account (TGA) spending, resuming after the U.S. government shutdown ended, could cause a short-term net liquidity inflow into the Bitcoin (BTC) market.

On the 14th (KST), Glassnode co‑founders Jan Happel and Jan Aleman said on X (formerly Twitter), "TGA liquidity releases will accelerate starting today, and historically TGA flows have led Bitcoin prices by about a week." They noted, "During the 2019 shutdown, Bitcoin confirmed a bottom roughly 12 days after the government resumed," suggesting a similar pattern could occur this time.

The TGA is a cash account within the Federal Reserve (Fed) where the U.S. Treasury holds government funds. During the shutdown, spending on payrolls, subsidies, contract payments, and so on was halted and funds were tied up in the TGA; after release, those funds move into the private sector at once, expanding liquidity. Negentropic described this as "an effect of roughly $150 billion of excess liquidity flowing into the market."

He characterized this shutdown phase as "the strongest liquidity squeeze in this cycle," diagnosing that "the peak appeared this week and a relaxation trend is likely to follow." However, he noted that investor sentiment is unstable due to the suspension of economic data releases, and in the short term NVIDIA's earnings could be the turning point for risk assets overall.

Technical indicators also show strengthening bottom signals. He explained, "Bitcoin's relative strength index (RSI) has entered extreme oversold territory for the first time since the FTX incident, and breaking below the lower volatility bands is also a rare occurrence." He added, "Excessive confidence in short positions is a psychological pattern often seen near bottoms."

He also said, "Total3 (total market cap of non‑BTC/ETH assets) is showing a relatively firm performance compared to Bitcoin," and projected, "If a short‑term bottom for Bitcoin is confirmed, Total3's rebound could be stronger, which would form the basis for an alt season."