The recent significant depreciation of the U.S. dollar has become a key driver behind Bitcoin’s price increase. RealVision crypto analyst Jamie Coutts points out that the dollar’s weakness provides a favorable macroeconomic environment for Bitcoin. However, he also emphasizes that two critical indicators—the U.S. Treasury volatility (MOVE Index) and corporate bond spreads—are issuing short-term warning signals that could threaten Bitcoin’s continued rise.
Currently, the dollar is undergoing one of its most severe monthly depreciations in the past 12 years. The U.S. Dollar Index (DXY) has fallen by approximately 5% since the start of 2025, creating conditions for Bitcoin’s price strength. Coutts explains that the dollar’s sustained weakness is the primary variable in his forecasting framework. He notes that since 2020, significant pullbacks in the dollar index have typically been accompanied by Bitcoin price increases, averaging around 30%. This correlation indicates that the depreciation of fiat currency is driving investors toward crypto assets, especially Bitcoin.
Despite the optimism fueled by the dollar’s weakness, Coutts maintains a cautious stance. He believes that although the overall trend leans toward bullishness, dynamic changes in the U.S. Treasury and corporate debt markets could weaken this momentum.
The MOVE Index, which measures expected volatility in the U.S. Treasury market, has recently warranted attention. As of March 10, 2025, the MOVE Index has risen by about 12% since the beginning of the year, signaling growing market uncertainty about future interest rate trends. Coutts points out that while its current value remains within a relatively stable range, the upward trajectory may foreshadow a tightening of liquidity conditions. Historical data shows that when the MOVE Index climbed above 140 in 2022, Bitcoin’s price dropped nearly 20% within two weeks. The current slight increase suggests that Treasury market volatility could become a limiting factor for Bitcoin’s price
Meanwhile, the widening of corporate bond spreads is further amplifying market uncertainty. Since mid-February, the yield spread between high-yield corporate bonds and Treasuries has expanded for three consecutive weeks, reaching its highest level since 2024. Coutts analyzes that significant reversals in corporate bond spreads have often coincided with Bitcoin price tops. For instance, in late 2021, when spreads rapidly widened to 2.5% from a low, Bitcoin hit $69,000 before entering a year-long downtrend. The current sustained widening may reflect a decline in market risk appetite, posing pressure on Bitcoin’s short-term performance.
Coutts concludes that despite the dollar’s depreciation remaining the main driver of Bitcoin’s price uptrend, the abnormal behavior of the MOVE Index and corporate bond spreads is sounding an alarm for the market. He states, “The overall outlook still leans toward bullishness, but investors need to remain vigilant about further deterioration in these indicators.” If the dollar continues to weaken without significant worsening of these metrics, Bitcoin could potentially break $100,000 in the first half of 2025. However, if Treasury volatility or corporate debt risk premiums accelerate, the market may face correction pressures.
Coutts’ analytical framework highlights Bitcoin’s deep connection to global financial markets. He views Bitcoin not only as a speculative asset but also as a reflection of traditional financial system stability. The interplay of dollar weakness, Treasury volatility, and corporate debt risks suggests that the current market is in a delicate balance. Investors should closely monitor the Federal Reserve’s monetary policy developments and their impact on these indicators to more accurately assess Bitcoin’s future trajectory.
The dollar’s weakness is providing upward momentum for Bitcoin, but the dynamic shifts in the MOVE Index and corporate bond spreads point to potential risks. At this stage, investors must find a balance between optimistic expectations and risk management. Based on the latest data, Bitcoin’s short-term performance may depend on the evolution of macroeconomic variables rather than a single factor.