10.03.2025 10:21
Real Vision analyst Jamie Coutts noted that the decline in the US dollar signals a bullish trend for Bitcoin, while emphasizing that two important indicators, Treasury bond volatility and corporate bond yield spreads, are raising concerns. The US Dollar Index has fallen to its lowest level in the last four months.
The decline of the US dollar creates an upward potential for Bitcoin, while some economic indicators are causing unease in the crypto market. Real Vision analyst Jamie Coutts stated that the depreciation of the dollar is a positive factor for Bitcoin, but two important metrics are raising alarms. The expert describes the current situation as a high-stakes game played between Bitcoin and central banks.
The Dollar Index Hits a Four-Month Low, Bitcoin Investors Lean Towards Cautious Optimism
As the dollar loses value, hopes for Bitcoin's rise are emerging, but some economic indicators are causing concern. Real Vision analyst Jamie Coutts noted that the weakening US dollar could be a positive factor for Bitcoin, while emphasizing that two important indicators are signaling caution in the short term.
Coutts stated in a post on the social media platform X on March 9, "As the dollar falls, my analytical framework shifts to bullish, but two indicators are still raising alarms: Treasury bond volatility and the interest rate spreads between corporate bonds." The analyst described the current situation as a high-stakes "game of chicken" between Bitcoin and central banks, while expressing a "cautiously bullish" outlook despite these concerning indicators.
According to Market Watch data, the US Dollar Index (DXY) fell to 103.85 on March 10, marking its lowest point in the last four months. The DXY is known as an indicator that measures the value of the US dollar against a basket of other major currencies.
In his analysis, Coutts explained that US Treasury bonds serve as collateral in the global economy, and increasing Treasury volatility is tightening liquidity in the market by straining collateral mechanisms. The analyst noted that the MOVE Index, which measures expected fluctuations in the US Treasury bond market, is currently stable but showing an upward trend. He assessed, "With the rapid decline of the dollar in March, a decrease in volatility or a reversal in the dollar's direction can be expected."
According to the expert's analysis, increasing Treasury volatility could lead to tighter liquidity conditions, which may ultimately force central banks to intervene in a way that benefits Bitcoin. Coutts also pointed out that the interest rate spreads between corporate bonds have been consistently widening for three weeks, emphasizing that the reversal of large corporate bond spreads has historically coincided with Bitcoin price peaks.
While concluding that these indicators paint an overall negative picture for Bitcoin, the Real Vision analyst stated, "Still, the depreciation of the dollar - one of the largest in 12 years this month - continues to be the primary driving force in my analytical framework."
Bravos Research also noted in its assessment dated March 6 that the falling DXY could be a significant support factor for "risk assets" such as stocks and cryptocurrencies.
In his assessment, Coutts listed other bullish factors such as a global race for strategic Bitcoin reserves, accumulation through mining, Michael Saylor's company adding another 100,000 to 200,000 Bitcoins to its Bitcoin treasury this year, the potential doubling of positions in exchange-traded Bitcoin funds (spot ETFs), and increasing liquidity.
Finally, the analyst stated, "Think of Bitcoin as a high-stakes game played with central planners. As options diminish and assuming long-term Bitcoin investors are taking positions without using debt, the odds are increasingly turning in favor of Bitcoin holders."