Bitcoin MACD Goes Red: Is a Major Crypto Slump Ahead?

This is the first sign of the end of bull momentum since 2022.
In the past, crossovers caused an average drop of 60%.
A strong dollar, risks from the BOJ, and ETF outflows are all putting pressure on the market.
There are supports at $84.5K and $74.5K, and there is a chance of short squeezes.

Long-term charts for Bitcoin, the most popular cryptocurrency in the world, show that it may be in trouble. For the first time in years, the monthly Moving Average Convergence Divergence (MACD) indicator has turned bearish. As the economy as a whole puts more pressure on the market, this change happens. Let’s make it simple.

Traders use the MACD to find changes in momentum. It looks at two moving averages of a price. A change from rising prices to falling prices is often signaled by the MACD histogram changing from positive to negative. A red bar below the zero line in November marked this change for Bitcoin. This means that the rise that started at $20,000 might be over.
MACD is like a speedometer in a car, to put it simply. When it goes into the red, the car is slowing down. In the case of Bitcoin, prices may go down.

This isn’t the first time this has happened with Bitcoin. This bearish MACD crossover has happened before big drops in every major cycle since 2012. For instance, in 2022, it caused prices to drop below $20,000 after reaching a high of almost $70,000. There were similar patterns in 2018 and 2014, with average drops of about 60%.

History shows that this could mean a long-term downturn. If things keep going the way they are, Bitcoin could drop to levels as low as $40,000 from its recent highs. But keep in mind that past events don’t always mean the future will be the same. Crypto can surprise you.

The price of Bitcoin is about $86,800 right now. $84,500 is an important support level because it connects higher lows from 2023 to 2024. If that breaks, it could lead to $74,500 or even the 2021 high of $70,000.