Bitcoin Bull Run has already stopped with ongoing sales from long-term holder wallets and a slowdown in ETF flow. To make it worse, it seems that another less known but significant market variable is facing BTC Bulls, signaling new challenges on the horizon.
This market variable is the Move Index, created by Harley Basman, a former CEO of Merrill Lynch. The index calculates implicit volatility using a weighted average of option prices of one-month state treasury options across multiple maturity (2, 5, 10 and 30 years). This method captures the collective expectations of the market participants on future interest rates.
The moving index has risen from 77 to 89 in three days and marked the sharpest increase since the beginning of April, when President Donald Trump’s tariffs shook global markets, including Bitcoin, which fell to $ 75,000.
More importantly, momentum indicators such as MacD signalize a clear bullish shift, suggesting that the index is ready for continued gains. It requires caution from Bitcoin Bull’s side, as spell forms with higher expected bond market valley, as captured by the Move Index, are known to cause liquidity tightening around the world.
US Treasury Motats are largely considered as high quality fluid assets and form a cornerstone of the global security pool, which helps reduce the credit risk of lenders and facilitate a steady stream of funds across financial markets.
Thus, increased volatility in the Treasury has notes a tendency to interfere with liquidity, increase borrowing costs and create ring effects across credit markets and the wider financial system. In such situations, lenders require higher risk premiums, and market participants withdraw from more risky assets, which ultimately slows down the flow of funds and adds stress to the global markets.
In addition, increased volatility of the Treasury often asks bondholders to reduce the duration risk of switching from longer dated bonds (such as 10- or 30-year-old tax messages) for short-term securities, such as two-year notes or treasury.
This “flight to quality” or “flight to security” usually accompanies a wider market sale as investors reduce exposure to equities, corporate bonds and other risk assets to maintain capital in the middle of volatility in the Treasury Market.
Therefore, it is not surprising that BTC’s price rallies have historically been characterized by falling trends in the moving index and vice versa.
To cut to the hunt, the latest rejection in the moving index could aggravate the pain of the BTC market and potentially elaborate on the price payment.
