Bitcoin Bull Run has already stopped with current sales from long -term holders of holders and a slowdown in ETF entries. To worsen things, another less known but significant market variable seems to turn against BTC bulls, reporting new challenges on the horizon.
This market variable is the MOVE index, created by Harley Bassman, former managing director of Merrill Lynch. The index calculates implicit volatility using a weighted average price of options on cash options for one month on several deadlines (2, 5, 10 and 30 years old). This method enters the collective expectations of market players concerning future interest rate movements.
The moving index increased from 77 to 89 in three days, marking the highest increase since early April, when President Donald Trump’s prices have shaken the world markets, including Bitcoin, which fell to $ 75,000.
More importantly, momentum indicators as MacD indicate a clear bullish change, suggesting that the index is ready for continuous gains. This calls for prudence on the part of Bitcoin bulls, because volatility spells of the higher obligations expected, as captured by the movement index, are known to cause liquidity in the world.
US Treasury tickets are largely considered as high -quality liquid assets and constitute a cornerstone of the global warranty basin, helping to reduce credit risk for lenders and facilitate a smooth flow of funds on the financial markets.
Thus, increased volatility in cash tickets tends to disrupt liquidity, increase borrowing costs and create drive markets and the wider financial system. In such situations, lenders require higher risk premiums and market players withdraw more risky assets, ultimately slowing down the flow of funds and adding stress to global markets.
In addition, increased volatility in cash tickets often encourages obligations to reduce the risk of duration by passing longer obligations (like cash notes, 10 or 30 years old) short -term securities, such as two -year tickets or cash flow bills.
This “flight to quality” or “flight to security” generally supports a larger sale on the market, because investors reduce exposure to stocks, business obligations and other risk assets to preserve capital in the midst of volatility in the treasury market.
Consequently, it is not surprising that the historically price rallies of the BTC were characterized by the drop in trends in the movement index and vice versa.
To pursue in pursuit, the last rebound in the MOVE index could exacerbate pain from the BTC market, potentially deepens compliance with prices.
