New assessments of how Bitcoin’s price cycles parallel the liquidity steps of the US Federal Reserve (Fed) attract attention in the market. Crypto research platform Alphractal has presented important macro data by examining the correlation between the Fed’s liquidity flows and fluctuations in Bitcoin prices in recent years.
Fed’s liquidity moves and Bitcoin prices
Alphractal’s analysis focused specifically on the Fed’s major instruments, such as the Reverse Repo Facility (RRP) and the Treasury General Account (TGA). These tools directly affect the amount of money in the market and therefore the performance of crypto assets. According to the data in the report, in 2020-2021, the total balance of RRP and TGA increased from approximately 2 trillion dollars to 7 trillion dollars, while Bitcoin reached from 10 thousand dollars to 69 thousand dollars.
Alphractal emphasized the following in a recent post: “We have been monitoring the Federal Reserve liquidity movements together with the Bitcoin price for 3 years. The Fed’s RRP and TGA movements are the least appreciated macro signal in crypto.”
When tightening came to the fore in 2022, it was pointed out that Bitcoin experienced a rapid decline from 69 thousand dollars to 15,500 dollars. It was observed that money market funds turned to short-term treasury bills in the 2023 and 2024 periods, and the RRP balance decreased steadily in this process. According to Alphractal, Bitcoin recovered towards $73,000 around the time the Fed started increasing liquidity again. The platform also noted weakening liquidity indicators ahead of the critical peak in Bitcoin around $126,200 in October 2025.
Mini glossary: The Reverse Repo Facility (RRP) is a mechanism that allows the Fed to temporarily absorb excess liquidity through short-term lending to financial institutions. The Treasury General Account (TGA) is the main account held at the Fed for the Treasury Department and transferred to public expenditures. These two mechanisms can directly affect the total amount of cash circulating in the market.
Bear market discussions in Bitcoin
The liquidity discussions came to the fore with a different analysis in which VirtualBacon shared his views on the timing of bear market bottoms in Bitcoin. VirtualBacon argued that market players’ expectations for a “great final crash” do not come true every cycle.
In the analysis, the bear markets of 2015, 2018 and 2022 were compared. Accordingly, only the 2022 cycle ended with a hard crash; In previous years, however, Bitcoin typically reached its lows shortly after the first major decline and then recovered.
VirtualBacon specifically noted that the 200-week simple moving average is an important support zone for Bitcoin. It is predicted that this technical indicator is currently around 61 thousand dollars and may rise to 63–64 thousand dollars in the next two months.
Fed policies and market expectations
In Alphractal’s latest report, it was stated that the Fed’s policy rate was in the range of 3.5-3.75 percent, consumer inflation was announced as 3.8 percent and the dollar index remained strong. Despite this, the decline in US Treasury spending and RRP balances continues to support liquidity. It has been exemplified before that Bitcoin started to recover under sales pressure in similar periods.
| Period | Fed RRP + TGA Total | Bitcoin Price |
|---|---|---|
| 2020–2021 | $2 trillion → $7 trillion | $10,000 → $69,000 |
| 2022 | rapid decline | $69,000 → $15,500 |
| 2023–2024 | Reduction | Recovery up to $73,000 |
| October 2025 | Weakening | $126,200 (peak) |
“Most players in the crypto market do not want to buy Bitcoin before there is a big final crash, which has not necessarily happened in previous cycles,” VirtualBacon assessed.
In general, liquidity expectations and technical levels of Bitcoin are closely monitored in the market depending on the steps of the Fed and the Treasury. In particular, the 200-week average level remains an important reference point for investors.
