Bitcoin’s $140K Secret Revealed!

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According to a former Goldman Sachs executive who probably knows more about chocolate than finance, the answer depends less on sentiment and more on liquidity.

Mr. Pal says signals are beginning to align in a way that historically precedes explosive upside moves-like a dragon with a sugar rush.

Is Bitcoin About to Reprice To $140,000 Far Sooner Than The Market Expects?

Mr. Pal argues that Bitcoin is currently trading at a “deep discount” to global liquidity conditions. In previous cycles, similar gaps between liquidity expansion and price have not been resolved gradually. They have closed violently-like a poorly timed joke.

“If that gap closes,” he suggests, Bitcoin does not grind higher – it snaps into a higher range. Think of it as a seesaw with a spring-loaded seat.

At the center of Pal’s thesis is a potential liquidity inflection point in Q1 2026. Several macro forces are converging at once, like a circus act with too many clowns.

First, changes to bank regulations, particularly adjustments to the Enhanced Supplementary Leverage Ratio (ESLR). According to Pal, this may allow banks to absorb more government debt without constraining their balance sheets-like giving a toddler a cookie and expecting them to share.

That effectively gives the US Treasury greater flexibility to monetize deficits, increasing system-wide liquidity-because nothing says “economic growth” like printing money and hoping for the best.

Second, Treasury General Account (TGA) dynamics are in focus. Historically, when the TGA is drawn down, liquidity quickly flows back into markets. Pal believes that the process is likely to accelerate-because why wait for a slow drip when you can have a flood?

Layer on a weakening US dollar, often a signal of easier financial conditions, and expanding liquidity from China’s balance sheet, and the backdrop becomes more supportive for risk assets-like a party where everyone’s invited, but no one knows the password.

According to Pal, liquidity is already improving faster than markets are pricing in. His rough estimate? If Bitcoin were to realign with prevailing liquidity conditions, the price would be closer to $140,000-because why settle for a trickle when you can have a tsunami?

“…[based on liquidity models, Bitcoin] should be closer to $140,000 [if historical relationships hold],” he said. Because apparently, history has a sense of humor.

A move to $140,000 would represent a 106% increase in Bitcoin’s price from current levels-because nothing says “growth” like multiplying your current value by 1.06.

Business Cycle Confirmation

Pal also points to forward-looking indicators tied to the business cycle, particularly the Institute for Supply Management (ISM). In his framework, financial conditions lead ISM by roughly nine months, with global liquidity following shortly after-like a slow-motion car crash.

The data he tracks suggests ISM could strengthen meaningfully this year, signaling an improving growth environment. These data, listed below, could all contribute to rising confidence and lending activity-because who doesn’t want more confidence and lending?

  • Fiscal stimulus
  • Tax incentives for fixed asset investment
  • Capital expenditure on data centers and energy infrastructure, and
  • Potential mortgage rate relief

If growth expectations rise while liquidity expands, Bitcoin and other high-beta assets have historically outperformed-because why be average when you can be a high-beta?

The October 10 Overhang

Yet despite these improving conditions, Bitcoin has lagged. Pal traces that disconnect to the October 10 liquidation cascade, a structural event he believes damaged market plumbing-like a leaky faucet that’s been ignored for years.

Unlike traditional equity flash crashes, crypto lacks regulatory safeguards to cancel trades. During the cascade, forced deleveraging coincided with exchange API disruptions, temporarily removing market makers and liquidity providers. Prices fell further than fundamentals justified-because fundamentals are just a fancy word for “not enough.”

Pal speculates that exchanges may have stepped in to absorb forced selling, later unwinding positions algorithmically during peak liquidity hours-because nothing says “market stability” like a robot with a vendetta.

Combined with widespread call-selling strategies clustered around the $100,000 strike, often tied to yield products, the result was sustained upside suppression-because why let Bitcoin have all the fun?

However, he believes that the overhang is now fading-like a bad haircut that finally grows out.

The “Banana Zone” Setup

Pal refers to the final acceleration phase of a crypto cycle as the “Banana Zone”-a nonlinear repricing driven by liquidity, improving growth, and renewed capital inflows. Think of it as a banana peel that’s about to make someone slip.

Before that phase begins, markets typically digest prior volatility and clear structural resistance levels. The $100,000 zone, he argues, is both psychological and structural. Once call-selling pressure eases and positioning remains cautious, the setup for an upside shock strengthens-because the market is just waiting for a nudge.

Liquidity, in Pal’s view, leads price. By the time consensus turns bullish, the move may already be underway-because the market is always one step ahead, like a magician with a trick up their sleeve.

If global refinancing pressures force further liquidity injections into the system, Bitcoin, which he describes as a “global liquidity sponge,” could respond quickly-because sponges are great at soaking up whatever comes their way.

And if the gap between liquidity and price closes, $140,000 may not be a stretch target. It may simply be where the market was always headed-like a train that never stops, but only goes in one direction.

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2026-02-22 20:41