Bitcoin’s rough week appears to have been less about crypto and more about the global financial plumbing.
- Bitcoin’s sharp decline was driven primarily by dollar strength rather than crypto-specific events.
- The rebound from $88K to $92K has not changed the underlying liquidity-driven market pressure.
- Investors appear unconvinced that current Federal Reserve measures are enough to ease financial conditions.
Market analyst Jamie Coutts CMT argues that the downturn was driven not by sentiment shifts inside the digital asset sector but by pressure coming from the strengthening U.S. dollar. In his view, crypto traders tend to underestimate the effect of global liquidity on price action, assuming that Bitcoin’s movements are dictated mainly by ETF flows, funding rates or market psychology. Coutts claims the opposite: Bitcoin is behaving exactly as any highly liquid, risk-sensitive global asset would during a liquidity squeeze.
Liquidity Crunch Takes Priority Over Crypto-Native Catalysts
The sequence of events has been unusually tight. Bitcoin plunged to $88,000 precisely when the U.S. Dollar Index spiked, before rebounding to $92,000 as the dollar cooled slightly. To Coutts, this synchronicity reinforces a pattern that has played out repeatedly for more than a decade. When the dollar strengthens, liquidity becomes expensive, and Bitcoin loses altitude almost immediately. When the dollar weakens, capital becomes more available and Bitcoin performs strongly. That rhythm, he says, has held up across halving cycles, market cycles and policy cycles.
Until the dollar starts behaving — which is ultimately a function of liquidity — conditions will stay rough. Bitcoin and crypto remain tightly correlated with the dollar because it acts as a real-time liquidity gauge.
Right now, the market is saying: whatever the central… pic.twitter.com/hdK5uxLXVs
— Jamie Coutts CMT (@Jamie1Coutts) November 19, 2025
This perspective casts recent crypto-focused headlines in a different light. ETF outflows, liquidation waves and social-media sentiment might contribute to volatility, but Coutts suggests they are not the origin of the move — they are symptoms. The center of gravity remains the dollar, not the crypto ecosystem. Even the rapid climb from $88,000 back to $92,000 doesn’t change the diagnosis: Bitcoin is simply adjusting to abrupt liquidity shifts rather than responding to internal supply-and-demand forces.
Market Skepticism Toward Fed Relief Measures
In addition to pointing to the dollar, Coutts believes markets are discounting the Federal Reserve’s attempts to ease conditions. Rate-cut expectations, liquidity facilities and capital-relief mechanisms have been well-telegraphed, yet yields, credit spreads and the dollar all indicate that liquidity has not meaningfully improved. Investors appear to be signaling that the scale of relief is too limited to counteract the tightening already underway.
This hesitancy is important because it means traders aren’t rotating into risk assets with conviction. Temporary rallies — like Bitcoin’s jump to $92,000 — risk becoming short-lived if liquidity fails to turn decisively.
When Liquidity Runs Thin, Markets Decide for Policymakers
Coutts stresses that monetary pivots rarely happen because policymakers choose them. Historically, liquidity stress forces the Fed and the Treasury to act when conditions become unstable enough. In that sense, the market — not the central bank — determines the moment when easing must happen. “The Spice Must Flow,” his closing metaphor, underlines a simple message: everything revolves around liquidity. When it moves freely, assets calm down. When it dries up, volatility becomes the norm.
Bitcoin may be recovering now, but the determining factor remains the same — the dollar is still in control.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/bitcoins-fate-now-tied-to-the-dollar-not-etfs-or-sentiment-analyst-claims/