Analyst: Dollar Plunge Fuels Bitcoin Bull Run, but Other Indicators Raise Concerns

BlockBeats News, March 10th, Real Vision crypto analyst Jamie Coutts said that a weakening dollar could drive Bitcoin higher, but there are two key indicators that may raise concerns in the short term. "Despite the dollar's plummet, my framework is becoming increasingly bullish, but two indicators still raise alarms: the US Treasury Bond Volatility (MOVE Index) and corporate bond spreads."

Coutts described Bitcoin as a "game" between various central banks. Despite these worrisome indicators, an overall "cautiously bullish" outlook is still present.

The MOVE Index is an indicator of expected volatility in the US Treasury bond market. Coutts noted that while the MOVE Index is currently stable, it is trending upwards. An increase in Treasury bond volatility could lead to further liquidity tightening. Meanwhile, corporate bond spreads have widened for three consecutive weeks. Reversals in significant corporate bond spreads typically coincide with Bitcoin price peaks.

Coutts concluded that overall, these indicators present a negative signal for Bitcoin. "However, the dollar's devaluation— one of the most significant monthly devaluations in the past 12 years—remains a key driver in my framework."