Bitcoin, often seen as a refuge from traditional currency instability, faces a paradox amid the dollar's devaluation. Experts analyze this phenomenon.
The Invisible Vise That Strangles Crypto
The MOVE index, which measures the volatility of US government bonds, plays a key role in this situation. Over time, it displays a subtle upward trend. The volatility of US Treasury bonds necessitates risk reduction in institutions, constraining liquidity. This situation adversely affects Bitcoin and other risky assets. Analyst Jamie Coutts notes that any changes in bonds trigger a chain reaction, affecting credits, investments, and market trust.
The Ghost Signal That Spooks Bitcoin
Widening spreads of corporate bonds also serve as a worrying signal. Historically, whenever spreads widened, Bitcoin reached a peak before a drop. Coutts believes this indicates a risk of default, prompting investors to shy away from risky assets.
How the Rules Change in 2024
Despite the dollar index's drop, Bitcoin remains under pressure. In 2024, new parameters emerge: spot ETFs, miners, and accumulation strategies create structural demand. However, this is not enough to prevent a price drop. Major players anticipate a credit crash and focus on cash, even as it weakens.
Bitcoin, under pressure from shifting market conditions and rebellious financial mechanisms, remains vulnerable despite potential to strengthen its position. The outlook remains uncertain.
