He positioned Bitcoin as a high-risk game against central banks, offering a cautiously optimistic perspective despite these alarming indicators. The US Dollar Index (DXY), which measures the value of the dollar against other currencies, fell to a four-month low of 103.85 on March 10, as reported by Market Watch.

According to Coutts, US Treasuries operate as worldwide collateral and an increase in Treasury volatility prompts collateral haircuts, thus squeezing liquidity. The MOVE Index, a measure of predicted volatility in the US Treasury bond market, is currently steady but on the rise, he noted.

“Given the fast drop of the dollar in March, one would anticipate volatility to shrink, or if not, for the dollar to bounce back,” which would be a bearish sign, he mentioned. Increased Treasury volatility could result in tighter liquidity conditions, which may force central banks to step in in ways that could ultimately favor Bitcoin, he proposed.

In contrast, corporate bond spreads have been consistently widening over the past three weeks, and major corporate bond spread reversals have historically occurred alongside Bitcoin price peaks, according to Coutts. While these indicators present a somewhat negative image for Bitcoin, the depreciation of the dollar – one of the largest in 12 years this month – remains the main factor in his analysis.

On March 6, Bravos Research suggested that a falling DXY could significantly boost risk-prone assets like stocks and crypto. Coutts also noted other positive elements, such as the global competition for strategic Bitcoin reserves or accumulation through mining, Michael Saylor’s Strategy planning to add another 100,000 to 200,000 coins to its Bitcoin treasury this year, a possible doubling of spot ETF positions, and increased liquidity.

“Consider Bitcoin as a high-risk game against the central planners. With their options diminishing – and assuming HODLers stay unleveraged— the odds are increasingly leaning towards the Bitcoin holder,” he concluded.

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