Opinion: The sharp fall of the dollar boosts the Bitcoin bull market, but other indicators are worrying

News on March 10, RealVision crypto analyst Jamie Coutts stated that a weak dollar could potentially strengthen Bitcoin, but there are two key indicators that may cause concern in the short term. Although my framework is becoming bullish with the plummeting of the dollar, two indicators still raise alarms: U.S. Treasury volatility (MOVE index) and corporate bond spreads. Coutts describes Bitcoin as a game between central banks around the world; despite these worrying indicators, overall it still presents a cautiously optimistic outlook.

The MOVE Index measures expected volatility in the U.S. Treasury market. Coutts observed that although the MOVE index currently remains stable, it shows an upward trend. An increase in treasury volatility could lead to further tightening of liquidity while at the same time corporate bond spreads have been widening for three consecutive weeks. A significant reversal in corporate bond spreads usually coincides with Bitcoin prices peaking.

Coutts concluded that overall these indicators send negative signals for Bitcoin. However, depreciation of the dollar - one of its largest monthly depreciations over past 12 years - remains a major driving force within my framework.