Bitcoin Faces Growing Bearish Pressure as MACD Indicator Turns Negative Amid Tariff Fears
Bitcoin (BTC) is experiencing a shift in momentum, with a key technical indicator signaling potential downside. The moving average convergence divergence (MACD) histogram, which has been a reliable predictor of price trends, has crossed below zero on Bitcoin’s weekly chart. This shift indicates weakening momentum, raising concerns among traders about a possible downturn. However, despite this bearish signal, Bitcoin’s price remains stable within a tight range, leaving investors to watch for confirmation of any trend change.
The MACD indicator compares the difference between two moving averages of Bitcoin’s price, and a negative crossover typically suggests a bearish trend. After Bitcoin saw a major rally, with prices approaching $100,000, the latest MACD reading suggests a potential reversal. Yet, the price has been consolidating between $95,000 and $100,000, making the significance of the negative signal less clear at this stage. Traders will be looking for further price movement to validate or invalidate this shift in momentum.
Global Economic and Geopolitical Risks Add to Market Volatility
In addition to the technical warning, broader economic and geopolitical risks are starting to weigh on Bitcoin’s prospects. U.S. President Donald Trump’s recent tariff announcements, including plans to impose 25% tariffs on steel and aluminum imports, have spooked investors. The possibility of escalating trade tensions could increase market volatility, potentially driving risk assets like Bitcoin lower. If these tariff threats turn into action, they could put upward pressure on bond yields, causing a sell-off in speculative assets.
Moreover, inflation concerns are rising, with the University of Michigan’s consumer sentiment survey revealing that inflation expectations have jumped to their highest level since November 2023. This uptick in inflation expectations could prompt the Federal Reserve to pause its rate-cutting cycle, keeping interest rates elevated and dampening investor sentiment toward riskier assets.
CPI Data to Be a Crucial Factor in Bitcoin’s Direction
As the market anticipates potential economic shifts, all eyes are on the upcoming release of the U.S. Consumer Price Index (CPI) data on February 12. A stronger-than-expected CPI report could signal persistent inflationary pressures, leading to further concern about the Fed’s interest rate policies. If inflation remains elevated, the Fed may hold off on further rate cuts, which could increase market uncertainty and put downward pressure on Bitcoin and other risk assets.
Bitcoin is currently testing crucial support levels, and a break below $90,000 could trigger further downside, confirming the negative MACD signal and potentially signaling a more significant correction. However, if the CPI report comes in weaker than expected, it could reverse market sentiment and give Bitcoin a chance to recover from its current range-bound movement.
Bitcoin’s Resilience Amid Uncertainty
Despite the bearish technical indicator and rising macroeconomic risks, Bitcoin’s long-term potential as a hedge against uncertainty remains intact. While short-term volatility could be a concern, Bitcoin has shown resilience in the face of economic challenges in the past. The cryptocurrency continues to attract both retail and institutional interest, and its role as a store of value in times of economic instability remains a key factor in its market outlook. Traders and investors will be closely monitoring the evolving situation to determine whether Bitcoin’s bearish signal is a temporary blip or the start of a more significant decline.
