Bitcoin Indicator That Predicted $70K Surge Turns Bearish as Trump’s Trade War Tensions Intensify

Bitcoin Faces Potential Downturn as Bearish Signal Emerges and Tariff Fears Mount

Bitcoin (BTC) is experiencing a potential shift in momentum as a key technical indicator flips bearish, coinciding with rising global economic concerns. The moving average convergence divergence (MACD) indicator, a widely followed momentum tool, has crossed below zero on Bitcoin’s weekly chart, signaling a potential loss of bullish momentum. Although this shift suggests the possibility of a downturn, it’s important to remember that such technical signals require confirmation from price action, and Bitcoin’s current price movement remains relatively stable.

The MACD is calculated by comparing the 12-week and 26-week moving averages of Bitcoin’s price. When the MACD crosses below zero, it indicates a bearish trend. This is the first time since mid-October that the MACD has dipped below zero, signaling a potential weakening of the uptrend that led Bitcoin to highs approaching $100,000. However, Bitcoin’s price has remained confined to a tight range between $95,000 and $100,000, making the bearish signal less impactful at this stage.

Economic Pressures and Trade Tensions Fuel Market Uncertainty

While the MACD’s bearish reading may raise some concerns for Bitcoin investors, it’s the broader economic and geopolitical landscape that could ultimately dictate the cryptocurrency’s future direction. Growing fears over trade wars, particularly President Donald Trump’s rhetoric on imposing higher tariffs on steel and aluminum imports, have added uncertainty to global markets. If these threats materialize into concrete actions, the resulting economic instability could lead to higher bond yields, reduced risk appetite, and a potential downturn for Bitcoin.

Adding to the pressure, inflation expectations are climbing. The latest consumer sentiment survey from the University of Michigan revealed that inflation expectations have jumped to 4.3% for the year ahead, up from 3.3% in January. This surge could keep the Federal Reserve cautious about cutting interest rates anytime soon, leaving investors nervous about the broader economic outlook.

According to market expert Alfonso Peccatiello, inflation fears are already being priced into the market, with 2-year inflation swaps hitting new highs. The consensus seems to be that the Fed is unlikely to reduce interest rates quickly, even if inflation drops. This ongoing uncertainty could continue to weigh on risk assets like Bitcoin.

Upcoming CPI Data Could Be a Key Catalyst for Bitcoin’s Next Move

Bitcoin traders are closely awaiting the release of the U.S. Consumer Price Index (CPI) data on February 12. If the CPI report shows stronger-than-expected inflation, it could trigger further selling in risk assets like Bitcoin, particularly if the broader market reacts negatively. With Bitcoin currently testing crucial support at $90,000, any downward movement below this level would likely validate the bearish MACD signal and strengthen the case for a trend reversal.

Despite the emerging bearish signal and growing macroeconomic risks, Bitcoin’s future remains uncertain. The cryptocurrency continues to face a volatile environment influenced by trade tensions, inflation concerns, and shifting market sentiment. Traders will need to closely monitor these factors as they assess whether the bearish MACD signal marks the beginning of a prolonged correction or just a temporary pullback in the market’s broader uptrend.

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