Bitcoin surge to $137K by Q3 possible if US Treasury continues liquidity injections — Analysts

The US Treasury has injected $500 billion into financial markets since February by drawing liquidity from its Treasury General Account (TGA), funding government operations after a $36 trillion debt ceiling was hit on Jan. 2, 2025.

Macroeconomic financial analyst Tomas said that this liquidity surge boosted the net Federal Reserve liquidity to $6.3 trillion, and it may support Bitcoin’s (BTC) price in the future, even though risk assets have reflected minimal growth so far.

US Treasury General Account’s expected liquidity flow. Source: X.com

The TGA represents the government’s checking account at the Federal Reserve, holding capital for daily operations like paying bills or collecting taxes. A decrease in TGA capital means the balance has been deployed into the broader economy, boosting available cash in the markets.

Tomas explained that The TGA drawdown commenced on Feb. 12, following the exhaustion of "extraordinary measures" after the debt ceiling was reached. The TGA balance has dropped from $842 to roughly $342 billion, releasing liquidity into the system, and the targeted liquidity is expected to rise up to $600 billion by the end of April.

The analyst added that the current tax season will temporarily drain liquidity, but the drawdown is expected to resume in May. If debt ceiling talks extend to August, net liquidity could hit a multi-year high of $6.6 trillion, which could cause a bullish tailwind for Bitcoin.

Bitcoin’s correlation with global liquidity. Source: Lynalden.com

According to a study by financial analyst Lyn Alden, Bitcoin has historically moved 83% of the time in line with global liquidity in a given 12-month period. The research termed “Bitcoin a Global Liquidity Barometer” compared Bitcoin to other major asset classes such as SPX, gold and VT, and BTC topped the correlation index with respect to global liquidity.

Past TGA drawdowns in 2022 and 2023 have fueled speculative assets like Bitcoin. Thus, a $600 billion boost, plus billions more added over Q2-Q3, could lift BTC’s value if market conditions remain stable.

Related: Bitcoin traders target $90K as apparent tariff exemptions ease US Treasury yields

Anonymous crypto trader Titan of Crypto shared a bullish outlook for Bitcoin, predicting that BTC could surge to a new all-time high of $137,000 by July-August 2025. In a recent X post, the analyst pointed out a bullish pennant pattern on the daily chart, with the price potentially heading toward a positive breakout.

Bitcoin bullish pennant by Titan of Crypto. Source: X.com

However, before pushing chips into a long conviction play, BTC must break and retain a position above its 200-day exponential moving average (EMA). As illustrated in the chart, Bitcoin faces resistance from all three key EMAs, namely, the 50-day, 100-day and 200-day indicators.

A collective reclaim above each moving average on a higher time frame chart could further strengthen the bullish case, allowing the crypto to retest its six-figure targets.

Bitcoin 1-day chart analysis. Source: Cointelegraph/TradingView

Related: Bybit integrates Avalon through CeFi to DeFi bridge for Bitcoin yield

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.