🚨 WHY CRYPTO IS FACING CHALLENGES — TRACK THE LIQUIDITY
The current softness in cryptocurrency markets isn’t solely linked to widespread fears or a sudden change in stance from the Federal Reserve.
What is the primary factor? Liquidity levels.
In recent weeks, the U. S. Treasury Department has been restoring its Treasury General Account (TGA). As a result, approximately $150 billion has been withdrawn from the financial system.
A higher TGA balance means less liquidity in the markets. When liquidity tightens, assets that carry risk typically face difficulties.
Now add to that:
• Indicators of a slowing economy
• Less surplus cash available
• High valuations in risk-related sectors
This leads to widespread underperformance — not limited to crypto alone.
Even significant U. S. tech firms — often referred to as the “Magnificent Seven” — are witnessing declines in 2026, with some companies dropping by 12–15%. This isn’t just isolated sell-offs. It's driven by broader economic factors.
Will the decline persist?
The TGA balance is said to be around $922 billion — a mark that has acted as a cap since the post-2020 era. Historically, once this account stops growing and starts to decrease, liquidity begins to flow back into the market.
Additionally:
• Approximately $150 billion in tax refunds is anticipated to flow into the economy by March
• A decreasing TGA balance would automatically inject funds back into the markets
Such a scenario could set the stage for a temporary relief rally.
In summary:
Crypto isn’t suffering in isolation. It’s responding to liquidity trends.
And liquidity, more than news headlines, often dictates market direction.
BTC
63,283.99
-3.15%
ETH
1,830.88
-2.33%
BNB
590.67
-1.28%