Bitcoin To $40,000? Signal Behind Past 60% Crashes Is Back
Overview
A recent analysis has highlighted a concerning technical indicator for Bitcoin, suggesting a potential bearish trend ahead. The Moving Average Convergence/Divergence (MACD) has turned bearish, signaling a pattern that has historically preceded significant price declines.
Technical Analysis Insights
MACD Indicator
Analyst Ali Martinez has pointed out that the MACD for Bitcoin has recently registered a bearish crossover. The MACD, a widely used technical analysis tool, consists of two lines: the MACD line and the signal line. The MACD line is derived from the difference between the 26-period and 12-period exponential moving averages (EMAs) of the asset’s price. The signal line represents the 9-period EMA of this difference.
When the MACD line crosses below the signal line, it typically indicates a bearish signal, suggesting that the asset may experience downward price movement.
Historical Context
In the analysis, Martinez referenced a chart showing the MACD changes for Bitcoin over the years. He highlighted past instances where similar bearish signals led to declines exceeding 60% for the cryptocurrency. This historical context raises concerns about the current market trajectory.
Additional Bearish Signals
In addition to the MACD crossover, a classic death cross has also emerged in Bitcoin’s moving averages. This occurs when the 50-day simple moving average (SMA) falls below the 200-day SMA. The analyst noted that this crossover has coincided with the recent downturn in the Bitcoin market. While previous death crosses have marked local bottoms, the one observed in 2022 initiated a bear market, suggesting that the current crossover could signify a continuation of negative trends.
Impact on the crypto market
- The bearish MACD crossover raises concerns among traders and investors about potential price declines for Bitcoin.
- Historical patterns indicate that similar signals have led to significant market downturns in the past, increasing market apprehension.
- The emergence of a death cross adds to the bearish sentiment, as it has previously been associated with prolonged bearish phases.
- The current situation highlights the importance of monitoring technical indicators in the cryptocurrency market, as they can provide crucial insights into price movements.
- The combined bearish signals may lead to increased volatility and cautious trading behavior among market participants.
Updated: 11/25/2025, 11:21:28 AM
