Bitcoin Faces Bearish Momentum Shift Amid Geopolitical Tensions and Rising Inflation Fears

Bitcoin’s (BTC) bullish momentum may be running into headwinds as a key technical indicator signals a shift to the downside, coinciding with growing fears over trade wars and rising inflation. The moving average convergence divergence (MACD), a momentum indicator, has recently dropped below zero on Bitcoin’s weekly chart, suggesting a potential shift in market sentiment from bullish to bearish. However, this shift is not necessarily an immediate threat, as other market factors could still influence Bitcoin’s direction.

The MACD, which tracks the difference between Bitcoin’s 12-week and 26-week moving averages, has been a reliable indicator of trend strength. When the MACD crosses below zero, it typically signals a bearish trend, whereas a crossover above zero indicates bullish momentum. Bitcoin’s recent bearish signal, which marks a reversal from the positive crossover seen in mid-October, suggests that the cryptocurrency may be losing some of its upward momentum.

Currently, Bitcoin remains within a narrow price range of $95,000 to $100,000, with little movement in either direction. This tight range means the recent bearish MACD signal may be less significant for the time being, as the market seems to be in a consolidation phase. It’s important to remember that MACD signals need to be confirmed by price action, and the lack of clear directional movement diminishes the significance of this shift.

Geopolitical Risks and Inflation Pressures Amplify Market Uncertainty

While the MACD’s bearish signal may concern some traders, broader economic and geopolitical factors could play an even larger role in Bitcoin’s price action in the near future. President Donald Trump’s recent rhetoric on trade tariffs, particularly his plans to impose 25% tariffs on steel and aluminum imports, has already raised concerns over economic stability. If these threats materialize into concrete actions, the market could face increased volatility, higher bond yields, and a flight to safer assets.

In addition to the tariff concerns, inflation expectations have risen, adding to market unease. The latest University of Michigan consumer sentiment survey showed that inflation expectations for the year ahead jumped to 4.3% in February, up from 3.3% in January. This surge in inflation expectations could deter the Federal Reserve from implementing aggressive interest rate cuts, keeping risk assets like Bitcoin under pressure.

Alfonso Peccatiello, author of Macro Compass, pointed out that the market is pricing in a prolonged period of stability for the U.S. economy, with little expectation of imminent rate cuts. As inflation remains elevated, the Fed may be hesitant to take quick action, which could result in continued market uncertainty.

The release of the U.S. Consumer Price Index (CPI) report on February 12 will be another key data point for traders. If the CPI report shows stronger-than-expected inflation, it could intensify concerns and push Bitcoin’s price lower, particularly if the broader market reacts negatively to rising inflation fears.

Bitcoin’s critical support level at $90,000 will be closely watched in the coming days. If the cryptocurrency fails to hold above this level, it could validate the negative MACD reading and confirm a shift in momentum to the downside. With macroeconomic factors continuing to influence market sentiment, Bitcoin’s price could experience more volatility as traders react to global events and inflation trends.