A popular indicator used in the world of cryptocurrency has many traders concerned about a potential prolonged decline in Bitcoin (BTC) prices. Recently, the moving average convergence divergence (MACD) histogram crossed below zero on the BTC price weekly chart, as reported by TradingView. A move like this suggests a shift from bullish to bearish market conditions, often being interpreted as a sell signal. Nevertheless, some analysts believe that the signal’s strength may be hindered by other factors, with the upcoming U.S. inflation report and Federal Reserve decision carrying significant influence over Bitcoin’s price.
The current market situation has several market participants questioning whether the resurgence seen in early stages of this year can really stand the test of time. An anonymous crypto trader known as @CryptoBullet1 shared his skepticism on Twitter, mentioning a strikingly similar situation approximately four years ago, which saw the market face a significant downturn after the bearish indicator appeared. Market collapses following bearish crossovers in previous years also give traders a cause for concern.
However, not all share the same sentiment. Katie Stockton, the founder and managing partner of Fairlead Strategies, maintains a different perspective. She believes that despite the new weekly MACD ‘sell’ signal, short-term oversold conditions and the possibility of this trend extending further offer a stronger likelihood of Bitcoin maintaining support close to $25,200.
Currently, Bitcoin is holding strong at the $25,200 support level despite the regulatory uncertainty and panic sales in alternative cryptocurrencies. Price charts could potentially face significant changes following the release of the U.S. consumer price index (CPI) on Tuesday and the Federal Reserve’s rate decision on Wednesday.
David Brickell, Director of Institutional Sales at crypto liquidity network Paradigm, suggests a greater leaning towards an upward trend for Bitcoin, stating that a lot of negative news has been processed in recent weeks. Brickell also believes that the CPI could very likely underestimate the current market conditions, potentially giving the Federal Reserve more flexibility in reducing interest rates, which could have a positive impact on the cryptocurrency market.
In conclusion, while some traders and analysts remain skeptical of the recent bearish shift in the MACD histogram, others look to external factors such as the U.S. inflation report and the Federal Reserve’s rate decision as crucial determinants for Bitcoin’s future price.
Source: Coindesk
