Raoul Pal: Bitcoin drop na caused by US liquidity drain, no be say crypto cycle don kpai

Published: 2026-02-02 19:58:49 |

Macro investor Raoul Pal dey talk say di recent Bitcoin (BTC) drop — about 30–40% from di peak to around $77k — na because dem drain liquidity for US small small, no be say crypto don fail structurally. E point out say Bitcoin chart dey almost same as UBS SaaS Index, argue say both na long-duration assets wey dey sensitive to marginal liquidity. Pal mention specific US technical fiscal drivers: di end of 2024 reverse repo drawdown, Treasury General Account (TGA) rebuild wey no get offsetting injections, and di current US government shutdown — all these don comot marginal liquidity from markets. E add say strong gold rally sef suck some liquidity. Pal expect say these na temporary factors: liquidity positives wey fit show soon include partial TGA drawdowns, easing eSLR rules, fiscal stimulus, and eventual Fed rate cuts under new leadership, wey together suppose restore liquidity and support rebound. E still dey bullish for multiple years into 2026, say small tokens normally drop ~70% when BTC drop ~30% but high-quality projects dey recover faster once liquidity return. Key SEO keywords: Bitcoin, US liquidity, TGA, reverse repo, government shutdown, long-duration assets.

Bullish

News dey frame Bitcoin recent big drop as liquidity-driven, temporary dislocation, no be structural failure. For traders dis mean: short-term: higher volatility and downside pressure as US fiscal and liquidity drains (TGA rebuilds, end of reverse repo drawdown, government shutdown) dey persist — BTC fit remain under pressure and smaller altcoins fit drop harder (~70% historically when BTC drops ~30%). Traders suppose expect choppy price action and possible chances for short-term shorts or protective hedges. medium-to-long-term: story dey bullish — Pal dey forecast upcoming liquidity catalysts (partial TGA drawdowns, eSLR easing, fiscal stimulus, eventual Fed rate cuts) wey go restore marginal liquidity and favour long-duration assets including Bitcoin. Dis suggest trade plan: manage risk for near term, watch liquidity indicators (TGA flows, Fed communications, reverse repo usage, gold flows) and scale into high-conviction BTC positions as US liquidity normalizes. Overall, because cause na external liquidity constraints rather than fundamental crypto deterioration, net price-impact outlook for BTC go be bullish once liquidity reverse.