Bitcoin Momentum Indicator Flashes Bearish Warning as Macro Risks Rise

A key momentum gauge closely followed by crypto traders has turned negative, signaling a potential shift into a deeper bitcoin downturn. The monthly Moving Average Convergence Divergence (MACD) histogram—an indicator that tracks trend strength—printed its first red bar below the zero line in November after bitcoin slid more than 17%. This bearish crossover suggests the powerful rally that began near $20,000 last year may have run its course, with sellers now taking control.

Historically, similar MACD shifts have preceded significant declines in every major bitcoin cycle since 2012. After BTC dropped from its then-record high near $70,000 in late 2021, the MACD flipped bearish in early 2022, foreshadowing the extended slide that pushed prices below $20,000. Comparable patterns triggered deeper bear markets in 2018 and 2014, reinforcing the indicator’s reputation as an early warning signal. While nothing guarantees that the latest reading will lead to another major downturn, the broader market environment is currently supporting the bearish outlook.

Several macroeconomic pressures—Japan’s rising fiscal concerns, persistent strength in the U.S. dollar index, elevated Treasury yields despite expectations of Federal Reserve rate cuts, and recent outflows from spot bitcoin ETFs—are adding downside risk. Traders now face the possibility of sharper volatility ahead. The first key support level sits around $84,500, aligned with a trendline connecting higher lows from 2023 and 2024. A breakdown below that zone could open the path toward April’s low near $74,500, followed by potential retests of the 2021 peak around $70,000.

Ethereum is also showing weakness after confirming a death cross, where the 50-day simple moving average dips below the 200-day average. Although this pattern sounds severe and can signal bearish continuation, its effectiveness as a standalone indicator for ETH has been inconsistent. Even so, the combination of negative technical signals across major cryptocurrencies suggests traders should prepare for heightened risk in the weeks ahead.