A critical bitcoin (BTC) momentum indicator that previously signaled a breakout to $70,000 has now turned bearish, coinciding with escalating trade war rhetoric from former U.S. President Donald Trump. While the indicator’s shift isn’t an immediate cause for concern, macroeconomic factors could introduce market volatility in the coming weeks.
MACD Turns Negative, but Bitcoin Holds Key Range
The Moving Average Convergence Divergence (MACD) histogram, a widely used technical analysis tool for measuring trend strength and changes, has flipped negative on bitcoin’s weekly chart. The MACD is derived by subtracting BTC’s 26-week average price from its 12-week average, with a signal line calculated as a nine-week moving average of the MACD itself. When the MACD histogram crosses above zero, it suggests bullish momentum, while a drop below zero indicates bearish pressure.
Bitcoin’s MACD first turned positive in mid-October, signaling a rally toward $100,000. However, the latest crossover below zero suggests waning momentum. Despite this, BTC remains within a broader trading range of $90,000 to $100,000, with recent price action consolidating between $95,000 and $100,000. The lack of a clear breakout diminishes the immediate impact of the bearish MACD signal.
Trump’s Tariff Plans and Inflation Risks Could Shake Markets
While technical indicators alone don’t dictate price movements, macroeconomic conditions could amplify BTC’s downside risks. At the forefront is Trump’s renewed push for tariffs, which has already begun to impact market expectations.
- Trump announced plans for a 25% tariff on all steel and aluminum imports, with additional duties on other metals expected later this week.
- He has also hinted at higher tariffs on European Union goods, which analysts at UBS warn could further disrupt global trade.
- The University of Michigan’s consumer sentiment survey showed inflation expectations rising to 4.3% in February, up from 3.3% in January, the highest level since November 2023.
This inflationary pressure could prevent the Federal Reserve from aggressively cutting interest rates, a factor that has historically influenced BTC’s performance.
Alfonso Peccatiello, author of Macro Compass, noted that 2-year inflation swaps have climbed to 2.72%, hitting new highs, as markets anticipate a prolonged Fed rate pause. “Even if inflation drops to 2%, the Fed doesn’t need to be in a hurry to cut,” he said.
Key Event: U.S. CPI Data Release on Feb. 12
Traders are now closely watching the upcoming U.S. Consumer Price Index (CPI) report for January, set to be released on Feb. 12. A higher-than-expected inflation reading could reinforce expectations that the Fed will delay rate cuts, potentially impacting risk assets like bitcoin.
While BTC’s MACD signal has turned bearish, price action remains the key determinant. A break below $90,000 would validate the bearish shift, but as long as BTC holds within its current range, traders may continue to wait for a stronger directional move.
