A critical momentum indicator for Bitcoin, the MACD histogram, has turned negative, signaling a potential shift toward bearish momentum that should concern traders. This indicator has historically been accurate in predicting significant price selloffs since October, with every bearish MACD cross preceding steep declines in Bitcoin’s value. Despite Bitcoin’s recent resilience, the MACD’s current bearish signal suggests traders should exercise caution, as past trends indicate a likelihood of further price drops.
The MACD’s track record has shown that when it turns bearish, Bitcoin often experiences substantial declines, while bullish signals have led to only weak recoveries. For instance, after the MACD crossed below zero on November 3, Bitcoin plummeted from around $106,000 to $80,000 within weeks. This pattern of sharp selloffs following bearish MACD signals reinforces the notion that sellers are firmly in control of the market.
Traders should closely monitor the MACD’s movements, as its current bearish indication could lead to further declines in Bitcoin’s price, making it a critical factor in short-term trading strategies.
Source: coindesk.com