"Rising volatility forces lenders to apply haircuts on collateral, thereby tightening liquidity.[…] Above 110 [on the MOVE Index] and I suspect there will be a few concerns at the central planner levels.” Over the past three weeks, US investment-grade corporate bond spreads have been widening, a shift Coutts views as a signal that risk assets—including Bitcoin—could face pressure: "This suggests that the demand keeping yields compressed relative to Treasuries is fading—and further widening could be negative for risk assets.” Despite these cautionary flags, Coutts remains optimistic about Bitcoin’s medium-term prospects, primarily due to the dollar’s "rapid decline.” He noted that the dollar’s drop in March—one of the most significant monthly dips in 12 years—historically has coincided with bullish inflection points in Bitcoin’s price.
Related Reading: This Bitcoin Signal Aligns With Price Tops, CryptoQuant Analyst Reveals He explained that while the dollar’s recent decline supports a bullish framework for Bitcoin, rising Treasury bond volatility (tracked by the MOVE Index) and widening corporate bond spreads are causing concern: Coutts emphasized the role of US Treasuries as the global collateral asset.
According to his research, "They have all occurred at Bitcoin bear market troughs (inflection points) or mid-cycle bull markets (trend continuations).” Related Reading: If This Happens, Bitcoin Price Will Shoot To $140,000, Says Analyst While acknowledging the limited historical dataset for Bitcoin, Coutts also cited key catalysts he believes could propel the digital asset higher: Nation-State Adoption: "A global nation-state race is underway,” Coutts wrote, describing a scenario in which countries either include Bitcoin in their strategic reserves or ramp up mining efforts.
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