A key momentum gauge that has reliably signaled bitcoin selloffs in recent months has flipped bearish again, putting bulls on alert.
Bitcoin is once again flashing a warning as the moving average convergence divergence (MACD) histogram drops below zero for the third time since its October high—indicating a fresh deterioration in momentum.
Breaking down the indicator
The MACD is derived from two moving averages. The MACD line represents the difference between the 12-day and 26-day exponential moving averages (EMAs), offering insight into trend momentum.
The signal line, a nine-day EMA of the MACD line, acts as a smoother reference.
The histogram—tracking the gap between these two lines—is the most telling component. A move above zero reflects bullish momentum, while a drop below zero signals bearish conditions. The steeper the move, the stronger the shift.
Traders favor the MACD because it helps cut through short-term volatility to highlight meaningful changes in trend direction. At present, it is pointing firmly to the downside.
A consistent warning sign
Since bitcoin’s rally to above $126,000 in October, the MACD has developed a strong track record of identifying major price moves.
When the histogram first turned negative in early November, bitcoin’s range above $100,000 quickly broke down, leading to a fall from around $106,000 to $80,000 within weeks.
A short-lived rebound followed as the indicator turned positive, but gains were limited. On Jan. 20, with bitcoin near $90,000, the MACD flipped bearish again—preceding another steep drop to nearly $60,000 by early February. The subsequent recovery stalled around $75,000.
So far, bullish signals have produced only brief rallies that fade quickly, while bearish turns have consistently led to deeper declines—highlighting persistent selling pressure.
Another bearish turn
Now, with the MACD histogram back below zero, the same pattern appears to be repeating.
While no indicator guarantees future outcomes, the MACD’s recent consistency makes this signal hard to dismiss. Despite bitcoin’s relative resilience during the Iran war, the latest shift in momentum suggests that downside risks may once again be building.
