Analyst: The dollar's plunge drives Bitcoin stronger, but other indicators are concerning

ChainCatcher news, Real Vision crypto analyst Jamie Coutts stated that a weaker dollar could drive Bitcoin stronger, but there are two key indicators that may raise concerns in the short term. "Although my framework is becoming bullish with the dollar plummeting, two indicators still raise alarms: the U.S. Treasury volatility (MOVE index) and corporate bond spreads."

Coutts described Bitcoin as a "game" between central banks, and despite these concerning indicators, the overall outlook remains "cautiously bullish."

The MOVE index is a measure of expected volatility in the U.S. Treasury market. Coutts noted that while the MOVE index remains stable, it is on an upward trend. Rising Treasury volatility could lead to further tightening of liquidity, while corporate bond spreads have widened for three consecutive weeks. A significant reversal in corporate bond spreads typically coincides with Bitcoin price peaks.

Coutts concluded that overall, these indicators pose a negative signal for Bitcoin. "However, the depreciation of the dollar—one of the largest monthly depreciations in the past 12 years—remains the main driving force in my framework."