Bitcoin’s Monthly MACD Turns Bearish, Echoing Past Downturns

A key momentum indicator has flashed red, signaling a potential shift toward prolonged bitcoin (BTC) weakness—an early warning that has preceded major cycle downturns since 2012.

The indicator in question is the monthly moving average convergence divergence (MACD) histogram. In November, it printed its first red bar below zero as prices dropped over 17%, marking a shift from bullish to bearish momentum. Essentially, the reading suggests that the bull run that began near $20,000 in early November has ended, giving bears control of the market.

Historically, bearish crossovers on the monthly MACD have often coincided with deeper corrections. For example, after bitcoin fell from roughly $70,000 to $50,000 in late 2021, the MACD turned negative in January 2022, preceding further declines that eventually pushed prices below $20,000. Similar patterns appeared following bearish MACD crossovers in 2018 and 2014, signaling the deepening of bear markets.

While past performance is not a guarantee of future results, the current environment strengthens the bearish case. Macro risks—including Japan’s fiscal challenges, the dollar index and Treasury yields holding firm despite potential Fed rate cuts, and recent outflows from spot ETFs—add weight to the negative signal.

Traders should watch for downside volatility. Immediate support lies near $84,500, defined by the 2023–2024 trendline of higher lows. A break could expose April’s low around $74,500 and the 2021 peak near $70,000.

Ethereum (ETH) is showing similar cautionary signs. The network confirmed a death cross, where the 50-day simple moving average (SMA) crossed below the 200-day SMA—a bearish signal indicating short-term weakness relative to the long-term trend. While the death cross has been an inconsistent predictor in ETH markets, it nonetheless signals potential downside pressure.