Bitcoin faces heightened volatility as MACD turns bearish, trade wars intensify, and market uncertainty fuels debates over its long-term resilience. Bitcoin has long served as a gauge of market mood in the ever-changing world of cryptocurrencies, with several technical indicators helping investors navigate its erratic terrain.
A major momentum indicator that had earlier predicted a possible spike to $70,000 has now become pessimistic, which aligns with President Donald Trump's increasingly aggressive trade war rhetoric. The combination of geopolitical and technical variables has left investors feeling apprehensive.
MACD Turns Bullish
A bullish signal from the Moving Average Convergence Divergence (MACD) histogram, a popular momentum indicator, boosted Bitcoin enthusiasts in October 2024. The indicator flipped positive on the weekly chart for the first time since April, indicating a renewed upward momentum and supporting the case for a move above $70,000. Technical signals like these are often used as predictors of big price movements, and the market reacted with optimism.
The MACD for Bitcoin became positive on February 10, 2025, indicating fresh rising momentum. Following weeks of turbulence, this change gave traders hope. The weekly chart's strong MACD histogram raised expectations that Bitcoin might hit $70,000 by indicating possible rises. In the face of economic uncertainty, investors kept a watchful eye out for consistent positive confirmation.
Bearish Shift Begins
However, in early February 2025, things took a significant turn. Potential bearish momentum was indicated by the same MACD indicator that had previously stated positive possibilities turning negative. This change came as a new global trade war began when President Trump announced sweeping new tariffs: 10% on goods from China and 25% on imports from Canada and Mexico. The market's initial response was harsh and quick.
The price of Bitcoin fell by around 7%, hitting $92,500, its lowest level in three weeks. Another well-known cryptocurrency, Ethereum, saw an even more severe drop, plummeting more than 20% to $2,565 before a little rebound. The total value of cryptocurrencies fell by 13% as the market as a whole lost $430 billion.
Volatility Surges
Market volatility has been made worse by the combination of a negative technical indication and rising geopolitical tensions. The unpredictability of cryptocurrencies has already put investors on edge, and now they have to deal with outside economic forces that might further affect market dynamics. In the past, tariffs have caused investors to reevaluate their risk exposure due to worries about inflation and economic slowdown.
Market experts view these changes in a variety of ways. Geopolitical tensions and the negative move in the MACD indicator, according to some, may portend a protracted decline in Bitcoin prices. In the upcoming months, Bitcoin may retest levels between $70,000 and $75,000, according to Arthur Hayes, co-founder and former CEO of BitMEX, who has hinted at possible further drops.
On the other hand, others contend that Bitcoin may be a desirable hedge against conventional market volatility due to its decentralized structure and restricted supply. According to Jeff Park, head of alpha strategies at Bitwise, Bitcoin will eventually gain from President Trump's trade policies regardless of how they turn out. Park thinks that Trump's economic policy, including tariffs, might be a long-term positive driver for Bitcoin, regardless of whether a good deal results in a weaker dollar or a prolonged trade battle leads to additional monetary stimulus.
In Summary
Bitcoin's price changes generally reflect market sentiment, influenced by technical indicators like the MACD. A bullish MACD indicated possible profits above $70,000 in October 2024. But when President Trump proposed fresh trade penalties in February 2025, the signal became negative and there was a significant selloff. Ethereum fell more than 20%, while Bitcoin fell 7% to $92,500.
The value of the Bitcoin market dropped by $430 billion. Expert opinions on Bitcoin's future are divided, and volatility has increased due to growing geopolitical tensions and economic uncertainty. Some foresee greater losses, while others say its scarcity makes gold a hedge against global financial instability amid trade war fears.
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