Bitcoin’s next key price catalyst could arrive on Friday as the US debt halt ends, potentially injecting fresh liquidity into the market and driving price rebounds.
The US Treasury reached its $36 trillion debt cap on January 20th the day after President Donald Trump’s inauguration. According to a letter published on January 17th, the “debt issuance period” began and was scheduled to continue until March 14th.
Bitcoin (BTC) fell 22% during its two-month debt suspension plan, exceeding $106,000 on January 21 to $82,535 as of writing on March 12.
BTC/USD, one-day chart since its debt suspension plan. Source: CointeLegraph/TradingView
According to Ryan Lee, chief analyst at Bitget Research, the resumption of government spending could result in increased liquidity to catalyze Bitcoin’s next rally.
“Cash on hand can increase demand for financial assets such as stocks and crypto, and there may be easing from ongoing volatility,” an analyst told Cointelegraph. “We expect overall momentum to improve during such times, but many other factors are important to note.”
Beyond global tariff uncertainty, “concerns such as inflation, interest rates, geopolitical issues remain unresolved,” Lee added.
Considering the debt halt ends just two weeks after the White House Crypto Summit, some of the new liquidity could flow to cryptocurrency, according to Aleksei Ponomarev, co-founder and CEO of Crypto Index Investing Firm.
“The surge in liquidity has usually benefited Bitcoin and risky assets, and the end of the US debt halt is no exception,” he told Cointelegraph, adding:
“The surge in liquidity definitely drives market price movements, but is limited to short-term impacts. Bitcoin’s long-term trajectory is related to institutional investment, ETF growth and regulation clarity and implementation.”
GMI Total Liquidity Index, Bitcoin (RHS). Source: Raoul Pal
The right side of Bitcoin (RHS), which marks the lowest bid price that someone is willing to sell the currency, could face a potential revision of nearly $70,000 until the end of the debt suspension period on Friday, based on its correlation with the global liquidity index.
Still, according to estimates from Real Vision’s chief Crypto analyst Jamie Coutts, the increase in monetary supply could exceed $132,000 by the end of 2025.
BTC forecast to $132,000 for growth in M2 money supply. Source: Jamie Coutts
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Bitcoin prices are still limited by concerns about the World Trade War
More global liquidity is a sign of Bitcoin’s optimism, but the world’s first cryptocurrency remains limited by global trade tariff concerns, according to James WO, founder and CEO of venture capital firm DFG.
“While some may argue that retaliation measures from countries with tariffs have already been priced, tariffs have delayed the economic impact beyond the initial announcement.”
“Increasing import costs and reducing corporate margins are likely to drive higher inflation, forcing central banks to raise interest rates longer under restrictive monetary policy,” he added.
This will strengthen liquidity conditions and make risky assets like Bitcoin “unattractive in the short-term to medium-term,” Wo said.
Related: Bitcoin Reserve Backlash Signal Unrealistic Industry Expectations
The European Union introduced retaliatory tariffs on March 12, threatening Bitcoin corrections of less than $75,000 in the short term. This could happen temporarily as Europe accounts for more than $1.5 trillion in annual US exports.
Despite concerns about the short-term revision, most analysts were optimistic about Bitcoin’s price trajectory in late 2025, with price forecasts ranging from $160,000 to over $180,000.
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