Bitcoin’s Rally Faces Two Major Risks Despite Dollar Drop

Crypto News

Written by Aaron S.,

Editor-In-Chief

Last Updated: March 10, 2025

Key Takeaways

Bitcoin benefits from a weaker dollar, but rising Treasury volatility and widening corporate bond spreads could pose short-term risks;
If Treasury bond volatility stays high, the dollar may regain strength, which could slow Bitcoin’s momentum despite its recent gains;
Widening corporate bond spreads have historically aligned with Bitcoin price peaks, which signals potential risks for its growth.

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Bitcoin’s Rally Faces Two Major Risks Despite Dollar Drop

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Jamie Coutts, Real Vision crypto analyst, believes Bitcoin is gaining momentum as the US dollar declines, but he warns that two financial indicators could pose risks.

The US Dollar Index (DXY) recently hit its lowest level in four months, which fueled optimism among crypto investors. Coutts noted that this decline is a key factor in his positive outlook, but other market conditions could complicate the trend.

Treasury bonds serve as essential collateral in the financial system, and when their volatility increases, liquidity tightens. The MOVE Index, which measures expected swings in the Treasury market, has been climbing even as the dollar weakens.

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Coutts pointed out that if volatility remains high instead of decreasing, the dollar could regain strength—potentially slowing Bitcoin’s momentum.

Corporate bond spreads have also been expanding for three straight weeks. Historically, major shifts in these spreads have coincided with Bitcoin’s price peaks. If this trend continues, the current widening could signal a possible slowdown for the cryptocurrency.

Despite these concerns, Coutts described Bitcoin’s current position as a challenge to central banks, suggesting that if liquidity tightens due to bond market shifts, central banks may intervene—potentially benefiting Bitcoin in the long run.

Meanwhile, Andrew O’Neill and Ryan Rasmussen recently shared their views on how the new executive order from US President Donald Trump could drive more investment into Bitcoin. What did they highlight? Read the full story.