Weekly-average bank reserves fell $77.579 billion for the week ended July 29, while the Treasury General Account rose $81.153 billion. Days later, the US Treasury raised its Q3 borrowing estimate by $68 billion, putting Bitcoin's liquidity backdrop under scrutiny as the Aug. 5 financing details approach.
Weekly-average bank reserves dropped $77.579 billion for the week ended July 29. Days later, the US Treasury raised its Q3 borrowing estimate by $68 billion. The overlap puts Bitcoin's liquidity setup under scrutiny, though several forces moved across the Fed's balance sheet, blurring any direct line from Treasury cash to the reserve decline.
Treasury lifts its borrowing estimate
Treasury's borrowing estimate, released Aug. 3, puts the end-September cash balance at $950 billion. Against the May 4 baseline, the headline increase is $68 billion.
Strip out a $19 billion higher starting balance, and the revision grows to $87 billion, driven mainly by lower projected net cash flows. The measure tracks net borrowing rather than gross issuance, excluding SOMA auction add-on rollovers while including financing needed for SOMA redemptions.
Reserves slide as Treasury's cash account climbs
The Fed's H.4.1 release shows weekly-average reserve balances at $2.984570 trillion for the week ended July 29, down from $3.062149 trillion the week before. Over the same period, the Treasury General Account climbed from $829.623 billion to $910.776 billion.
On the Wednesday, July 29 snapshot alone, reserves stood at $2.944541 trillion against a $970.442 billion TGA balance. That $81.153 billion TGA rise was the largest named component of an $89.880 billion weekly-average increase in deposits other than reserve balances, but other Fed balance-sheet items shifted too, so Treasury cash was only part of the week's reserve story.
The Aug. 5 financing mix is the next test
Treasury scheduled its Q3 financing details for 8:30 a.m. on Aug. 5. As of 1:53 a.m. UTC on Aug. 4, the official quarterly refunding index still listed the policy statement, auction schedule and buyback schedule as pending.
That package will turn the single borrowing total into an actual financing map. A bill-heavy plan's reserve effect follows buyers' funding sources, while more coupon supply leans on demand for longer-dated debt.
SOMA Manager Roberto Perli, speaking in his personal capacity on July 9, called reserves ample but warned that heavy net bill issuance in July and August 2026 could tighten money markets, adding that reserve-management purchases could be adjusted as conditions change. Meanwhile, the New York Fed's overnight reverse-repo operation accepted $2.127 billion from four counterparties on Aug. 3. The week's broader reverse-repo average ran $343.947 billion, with $342.803 billion held by foreign official and international accounts.
Bitcoin's next macro signal comes from that plumbing. The Aug. 5 financing map will show where Treasury puts the weight, and reserve balances after settlement will show whether the pressure reaches broader risk appetite.
Source: CryptoSlate
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