US Tax Deadline to Test Bitcoin Liquidity Amid Tightening Dollar Funding

The upcoming US tax deadline on Tuesday will test the liquidity of Bitcoin and other financial markets. According to a recent report, the estimated-tax deadline could shift cash towards the Treasury, tightening dollar funding and limiting risk-taking before policymakers conclude their September 15-16 meeting.

Bank reserves, which support payments and funding rather than measuring traders' available cash, have shown improvement in recent weeks. The Federal Reserve's September 10 balance-sheet release showed that weekly-average bank reserves rose $96.779 billion to about $2.991 trillion in the week ended September 9.

The Treasury General Account, however, fell by $84.6 billion to $883.3 billion on a weekly-average basis. This cash movement alongside the policy decision due the following day will put liquidity under pressure if it tightens dollar funding and limits risk-taking.