A temporary U.S. dollar liquidity crunch is influencing Bitcoin’s price decline, particularly as the Treasury General Account (TGA) nears $1 trillion during a prolonged government shutdown. This situation has led to increased pressure on risk assets like Bitcoin and other cryptocurrencies. The Federal Reserve has responded with emergency repo operations, injecting nearly $30 billion into the market. These actions are accompanied by measures taken to sustain operations during the fiscal impasse. 🧐 The liquidity squeeze is being fueled by a substantial buildup in the TGA. This impact on market liquidity is highlighted by rising funding costs and a widening SOFR-FDTR spread. Experts suggest that Bitcoin’s price fluctuations may reflect these broader effects across the crypto space. History suggests similar recovery patterns after past government shutdowns, with both Bitcoin and DeFi sectors potentially rebounding quickly once liquidity issues are resolved.