Crypto followers on Twitter have expressed concerns that a prolonged price slide may be on the horizon after a widely-tracked Bitcoin (BTC) technical analysis indicator flipped bearish. The Moving Average Convergence Divergence (MACD) histogram, used to measure trend strength and changes, has crossed below zero on the Bitcoin price weekly chart, according to technical analysis platform TradingView. This shift from bullish to bearish is widely considered a sell signal. @CryptoBullet1 tweeted Monday, Moonboys in disbelief, referring to those who had expected a meteoric rally.
The bearish crossover is similar to one observed roughly four years ago, when the market was coming off an impressive rally, much like the one seen over the past two months. This has led some to speculate that BTC could drop to $19K-$20K. However, Katie Stockton, founder and managing partner of technical analysis research provider Fairlead Strategies, disagrees. She believes that short-term oversold conditions are in place and intermediate-term oversold conditions are in reach, which gives Bitcoin a better chance of holding up near support at $25,200.
Bitcoin is currently holding the resistance-turned-support of $25,200, and the U.S. inflation figure due today and Wednesday’s Federal Reserve decision will also influence Bitcoin price performance. David Brickell, director of institutional sales at crypto liquidity network Paradigm, believes that the bias for Bitcoin is to the topside. He said, We’ve digested a lot of bad news in the past couple of weeks, including a reprice of higher rates and the U.S. dollar since April. Risk/reward for a move back to top of the range [is attractive].